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TKUMBULL  WHITE, 


Silver  arxd  Gold 


* * 

A  Bympofiinm  of  the  views        ^  '         * 

of  all  parties  on  the  ^  V  '    Oy*    '^ 

Gvirrencvj  Q\jestior( "^ -^  ~     i 


as  expressed  by  their  leading 
advocates 


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ThorOUg^hly    •xpoundln^  th« 

doctrlnea   of    f  fCe     SllVef^  .$J^ 

Mono-metallsm  and  Bl-metaliam,  with 
all  the   arguments,    pro.  and   con. 


From  the  per\s  of 


John  Sherman,         Wm.  M.  Stewart. 
^  Wm.  B.  Allison,        W.  J.  Bryan, 

John  G.  Carlisle,        Wm.  A.  Peffer, 
Edward  Atkinson,    Wm.  H.  Harvey, 
Bei^j.  B.  TiUman,  and  others. 


EDITED  BY  TRUMBULL  WHITE. 

Aflthov  of  **Thm  Wovtd'B  ColomblAa  Xzpooltioii,**  **  Wiff  in  th« 


With  portraits  of  leading 
Mateamen  and  Eoonomlata* 


Copyrighted,    1893.   h9 

I 

Trumbull  wHiin. 


PREPACB. 


It  18  not  often  that  any  economic  or  political  contro^ 
versy  rouses  discussion  equal  to  that  engendered  by 
the  gi'ave  financial  questions  now  at  issue.  A  single 
gold  standard  of  currency,  an  international  agreement 
for  bimetallism,  the  free  coinage  of  silver  by  the 
United  States,  all  sorts  of  solutions  of  the  present  com- 
plicated situation,  find  their  advocates  in  the  public 
prints.  Tons  of  books  and  acres  of  newspaper  pages 
have  been  filled  with  the  arguments  in  favor  of  the 
ideas  of  their  writeii^.r^Kuf ^ermore,  to  prove  that  all 
this  is  not  entirely  wasted  effort,  such  books  are  bought 
and  read  in  large  numbers,  and  newspapers  find  no 
more  popular  subject  for  editorial  and  news  columns 
than  the  financial  questions.  The  growth  of  this  senti- 
ment of  interest  has  been  gradual  through  the  last  few 
years,  while  other  questions  were  holding  paramount 
position  in  the  minds  of  the  people.  But  all  at  once 
there  came  a  wave  of  awakening  to  the  present  impor- 
tance of  currency  systems  and  their  relation  to  the 
everyday  prosperity  of  the  country,  and  discussion  be- 
gan to  multiply  almost  in  geometrical  ratio.  It  was 
necessary  to  feed  the  enormous  demand  for  informa- 
tion, and  tiie  flood  of  books,  pamphlets,  and  papers  was 
the  natural  consequence. 

In  all  this  mass  of  literature  there  has  been  one  lack. 
No  single  work  has  been  available  to  the  student  who 

(6) 


f  PREFACE. 

■ought  a  fair  presentation  of  both  sides  of  the  question 
at  issue.  With  a  recognition  that  this  was  an  omission 
which  ought  to  be  filled,  the  present  work  was  planned 
and  brought  into  the  form  which  it  now  takes.  To 
give  between  one  pair  of  covers  the  basic  principles  of 
each  recognized  school  of  currency  economists,  and  the 
arguments  in  favor  of  them  was  one  portion  of  the 
plan.  To  have  these  principles  and  arguments  pre- 
sented by  the  most  eminent  advocates  on  either  side, 
who  should  bring  to  their  writings  years  of  study  and 
experience  and  fame  sufficient  to  entitle  their  utter- 
ances  to  respect  as  the  best  interpretations  of  their 
views,  was  the  remainder  of  the  plan.  It  was  believed 
that  these  eminent  men,  statesmen,  economists,  finan- 
ciers, would  respond  to  such  an  idea  ;  that  they  would 
welcome  such  a  proper  means  of  placing  needed  infor- 
mation before  an  enquiring  public  seeking  knowledge 
enabling  them  to  form  proper  judgment ;  that  they 
would  recognize  the  importance  of  a  fair  presentation 
of  the  questions  at  issue  in  the  receptive  and  inquiring 
state  of  the  public  mind ;  and  that  they  would  be  glad 
to  assume  a  portion  of  the  labor  of  making  such  a  dis- 
cussion accessible  to  many  readers.  There  was  no  dis- 
appointment to  follow.  The  most  eminent  men  in  the 
United  States,  famous  in  all  walks  of  life  which  would 
bring  them  into  familiarity  with  these  financial  ques- 
tions, responded  with  hearty  interest.  The  result  is 
the  volume  offered  herewith.  Its  contents  have  been 
supplied  by  senators  and  representatives  in  congress, 
by  governors,  by  economists  in  private  life,  by  great 
editors,  by  college  professors,  by  bankers,  by  theorists, 
and  by  practical  men.  Credit  must  be  given  for  the 
courtesy  of  the  Chicago  Record  which  enabled  the  use 


PBBFACEL  7 

of  certain  articles  included*  in  a  discussioit  earned  on 
through  the  columns  of  that  paper,  by  many  eminent 
advocates  on  either  side  of  the  financial  debate. 

Every  phase  of  the  question  is  here  presented,  in 
fullness  of  detail,  comprehensively,  and  clearly.  The 
opinions  of  our  great  men  are  side  by  side  and  may  be 
weighed  one  against  another.  The  argumcLcs  which 
they  advance  are  presented  in  fair  competition  with 
one  another,  and  each  may  stand  or  fall  by  its  merits. 
The  result  is  that  every  reader  who  seeks  to  know  what 
is  the  right  solution  of  the  problem  that  meets  him, 
rather  than  the  mere  fortifying  of  himself  in  an  opinion 
previously  formed,  has  here  the  material  wherewith  to 
form  an  opinion  that  he  may  defend,  from  full  and 
careful  study  of  all  opposing  views. 

The  whole  object  then,  in  the  making  of  the  book, 
has  been  to  furnish  a  full  exposition  of  the  financial 
questions  under  discussion,  giving  the  views  and  ar- 
guments of  the  leaders  in  the  conflict,  partisan  and 
non-partisan.  But  in  the  selection  and  editing  of  mat* 
ter,  in  the  compilation  of  the  contributions,  partiality, 
partisanship,  the  influence  of  editorial  opinion  have  had 
no  place.  The  result  is  that  for  the  first  time  a  thor* 
oughly  disinterested  presentation  of  the  whole  subject 
is  made  accessible.  If  it  fills  a  portion  of  the  need 
which  it  is  intended  to  fill,  enabling  any  inquirer  to  de- 
cide for  himself  what  position  he  should  take,  as  a  man 
and  a  citizen,  it  will  have  fulfilled  its  object. 


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^-v.-.i^-IFCTv',:, 


TABLE  OF  CONTENTS. 


PAOI 
IlTTBODUCnOH      •••••••  13 

CHAPTER  I. 
Thb  Habvet-Laughlin  Debatb       •  •  •  .       23 

CHAPTER  II. 
By  Sbbatob  Joseph  N.  Dolph,  of  Oebqon  •  ,88 

CHAPTER  III. 
By  Senatob  Geobob  G.  Vest,  of  Missoubi  .  .124 

CHAl^ER  IV.     . 
By  Senatob  Geobob  F.  Hoab,  of  Massachusetts  •     166 

CHAPTER  V. 
By  Senatob  John  Sherman,  of  Ohio        •  .  .304 

CHAPTER  VI. 

Thb  Science  of  Money. — By  Senatob  Wm.  M.  Stewabt, 

OF  Nevada  .......     225 

CHAPTER  VII. 
By  Sbnatob  Wm.  B.  Allison,  of  Iowa       .  .  .241 

CHAPTER  VIII. 
By  Hon.  J.  Steeling  Mobton,  Secbetaby  of  Agbicultxtbe     267 

CHAPTER  IX. 
By  Hon.  John  Dalzell,  of  Pennsylvania  •  .     269 

CHAPTER  X. 
Pbbsidbnt  Cleveland's  Lbtteb       .  •  •  •     280 

CHAPTER  XL 
William  J.  Bbyan's  Reply  .  •  •  •     285 

CHAPTEI?  XII. 
By  Senatob  Julius  C.  Bubbows,  of  Michigan    •  •     201 

CHAPTER  XIII. 
By  Hon.  Elijah  A.  Mobse,  Massachusetts         •  •     209 

CHAPTER  XIV. 

Thb  Fall  of  Pbicbb— The  Cause  and  the  Cure.— By 
Pbbsidbnt  E.  Benjamin  Andbews,  of  Bbown  Uni- 
VBB0ITY         .•....•      301 

chapter  xv. 
Tmm  Banking  Pbivoiplb.^By  Edwabd  Atkinson         •     331 

W 


10  CONTENTS. 

CHAPTER  XVI.  PAGB 

By  Hon.  CH1..8.  Foster,  of  Ohio,  Ex-Sbcbetaby  of  the 

TBEABUBf      ....••.        353 

CHAPTER  XVII. 
Bt  Senatob  Fbed.  T.  Dubois,  of  Idaho    .  •  •     360 

CHAPTER  XVIII. 

By  Mubat  Halstead,  Editob  of  the  Brooklyn  Stand- 

abd-Union  .......     365 

CHAPTER  XIX. 
By  Ex-Govebnob  Hobacb  Boies,  of  Iowa  «  •     373 

CHAPTER  XX. 

By  Colonel  A.  K.  McClube,  Editob  of  the  Philadel- 
phia Times  ......      375 

.CHAPTER  XXI. 
By  Mobbis  M.  Estbb,  of  Califobnia         .  .  .     3T7 

CHAPTER  XXII. 
By  Jambs  H.  Eckels,  Comptbolleb  of  the  Tbeasuby  •     399 

CHAPTER  XXIII. 

National  Cubbency  and  Bankino  System.— By  Wil- 
liam P.  St.  John.  Pbesident  of  the  Mbbcantilb 
National  Bank,  New  Yobk      .  .  .  .409 

CHAPl'ER  XXIV, 

A  System  op  Cubbency.  —By  E.  S.  Lacey,  Ex-U.  S.  Comp- 

tbollbb       ....«•.     429 

CHAPTER  XXV. 

SlLYEH  AND  THE  BANKS. — BY  LYMAN  J.  GAOE,  PbBSIDENT 

of  the  Fibst  National  Bank,  Chicago         .  •      437 

CHAPTER  XXVI. 
By  Senatob  W.  A.  Peffer,  of  Kansas     .  .  .443 

CHAPTER  XXVII. 
By  E.  Rosewateb,  Editob  of  the  Omaha  Bee    •  •      468 

CHAPTER  XXVIII. 
By  John  G.  Cablislb,  Secbbtaby  of  the  Treasuby     •     480 

CHAPTER  XXIX. 

Cablislb's  Speech  Cbiticised.— By  Benjamin  R.  Till- 
man, Ex-Goybbnob  of  South  Carolina  .  .      516 

CHAPTER  XXX. 

Siltbb  in  the  Constitution.— By  J.  B.  Cheadle,  Ex- 

Conobbbsman  fbom  Indiana       .  •  •  •     535 

CHAPTER  XXXI. 
Bt  Hon.  Joseph  C.  Sibley^  of  Pennsylyanla       .  ,     643 


* '  I" 


».-  * 


»■«. 


LIST  OF  ILLUSTRATIONS. 


TAQM 

Trumbull  White Frontispiece. 

The  Knights  and  the  Shield  •         •        •       •       .19 

William  H.  Harvey 38 

Henrt  M.  Teller .55 

Joseph  N.  Dolph     •••••••  74 

Riohard  p.  Bland 91 

Oeorqe  G.  Vest 110 

David  B.  Hill 127 

Arthur  P.  Gorman        ••••••        146 

Charles  F.  Crisp       •       •       •       •       •        •       •    163 

John  P.  Jones         •••••••        182 

John  Sherman   •        •        •       .        •       •       •       .199 

William  M.  Stewart 218 

William  B.  Allison  ••••••    235 

J.  Sterling  Morton 254 

Grover  Cleveland    •        • 271 

William  J.  Brtan 290 

Julius  C.  Burrows 307 

Fred.  T.  Dubois 326 

Horace  Boies 343 

James  H.  Eckels 362 

William  A.  Peffer 379 

Benjamin  Harrison 398 

Thomas  B.  Reed         •••••••    415 


12  LIBT  OF  ILLUSTBATIOirS. 

William  MoKinlbt        «.••.•  434 

Levi  P.  Morton 451 

Robert  T.  Linoolm 470 

Stephen  B.  Elkinb 487 

Chaunoet  M.  Depew 506 

John  G.  Carlisle 523 

BBNJA1I0N  B.  TlLLHAN 530 

Joseph  C.  Siblbt   •••••••  631 


'>. . 


AN  INTRODUCTION  AND  A  LEGEND. 


A  CHAPTER  written  to  inti^oduce  a  discussion  such  as 
the  one  which  fills  this  volume  can  have  but  an  unim- 
portant function  to  perform,  if  it  preserves  the  im«* 
partiality  which  is  the  measure  of  the  real  value  of  the 
work.  It  cannot  elucidate  the  primary  truths  about 
the  currency  question,  on  which  the  adherents  of  all 
schools  agree,  for  there  are  practically  none  such,  even 
as  primary  as  the  definition  of  money  itself.  It  can- 
not relate  the  history  of  money  in  the  world,  for  the 
dispute  begins  with  the  beginnings  of  this  history.  It 
cannot  even  do  much  toward  outlining  the  creation  of 
our  original  monetary  system,  on  the  progress  of  legis* 
lation  on  financial  questions  in  our  own  country,  be* 
caus«  it  is  on  these  very  historical  facts  themselves  that 
most  pronounced  difierences  arise.  Almost  all  that 
can  be  done  is  to  indicate  something  of  the  present 
supreme  interest  which  the  subject  has  created,  and 
something  as  to  the  form  which  the  discussion  here 
has  taken.  When  that  is  done,  the  reader  will  very 
properly  prefer  to  turn  to  the  arguments  that  bear 
directly  on  the  case  in  dispute. 

The  silver  question  has  practically  supplanted  the 
tariff  question  in  public  interest  and  discussion.  The 
financial  stringency  which  began  to  make  itself  gener- 
ally felt  in  1898,  and  from  which  the  country  was  so 
slow  in  recovering,  caused  every  thoughtful  man  to  seek 
mn  explanation  of  the  condition^  and  finding  the  reason 


14  AK  INTBODtTOTIOK   AND  A  LEGBKB. 

of  the  condition,  to  seek  a  remedy  for  future  crises  ot 
the  same  sort.  The  result  was  the  wonderful  spread 
of  discussion  on  financial  questions,  the  agitation  for, 
and  the  oppposition  to  the  free  coinage  of  silver  by  the 
United  States,  at  a  ratio  to  gold  of  16  to  1  in  weight. 
Of  course  the  same  questions  had  aroused  widespread 
interest  for  generations  before.  No  one  who  knows  the 
history  of  our  country  can  suggest  that  interest  in  our 
financial  system  and  the  legislation  which  has  created  or 
changed  it  is  a  new  thing.  With  the  memory  of  warm 
discussions  and  prolonged  ones  in  every  session  of  con- 
gress for  many  years,  over  these  or  similar  contro- 
versies; the  introduction  of  new  forms  of  legislative 
enactment, nearly  as  often;  and  the  utterances  in  every 
political  platform,  state  or  national,  on  the  currency 
question,  it  cannot  be  said  that  the  matter  has  been  left 
in  abeyance,  and  not  been  brought  to  the  attention  of 
the  public  at  large.  The  record  of  the  last  half 
century  of  United  States  history  is  full  of  the 
chronicles  of  widespreading  waves  of  popular  senti- 
ment on  political  and  economic  and  moral  questions, 
some  of  them  having  the  dignity  and  strength  of  a 
concerted  movement,  enlisting  in  their  ranks  men  of  the 
highest  character  and  ability;  others  failing  to  mani- 
fest such  strength,  and  so  losing  their  importance. 

Some  of  these  movements  have  been  financial.  The 
place  to  classify  the  present  discussion  of  the  silver 
question  varies  according  to  the  point  of  view  from 
which  the  observer  looks.  But  few  fair  men  fail  to 
acknowledge  that  the  causes  of  free  coinage  of  silver, 
international  bimetallism,  and  gold  monometallism 
have  each  enlisted  in  their  service  men  of  worth  and 
might  iu  learning,  in  statesmanship,  in  eloquence^  in 


AK  INTRODUCTION  AND  A  LEGEND.  16 

fiune,  in  honesty,  and  in  genuine  regard  for  the  wel« 
fare  of  all  people,  in  the  future  as  well  as  in  the  present. 
This  fact  should  make  possible  the  freest  and  fullest 
discussion  of  the  subject  from  every  point  of  view, 
without  rancor  or  any  stronger  feeling  than  desire  to 
attain  the  right.  Such  discussion  has  indeed  become 
full  and  free,  but  unfortunately  there  has  aiisen  that 
very  feeling  which  is  to  be  regretted,  and  sectional 
pride  or  sectional  interest  have  been  sought  to  array 
themselves  under  one  or  the  other  banner  in  unanimity. 
The  discussion  which  has  become  so  general,  and  which 
finds  one  of  its  expressions  in  the  present  volume,  is  of 
course  but  the  successor  of  less  general  discussion  main- 
tained for  many  years.  But  in  its  recent  form  it  is 
really  young,  and  so  far  as  the  explosive  interest  which 
has  been  awakened  throughout  the  central,  western, 
and  southern  states  is  concerned-,  among  people,  hun- 
dreds of  thousands,  or  even  millions  of  them  who  are 
not  alwtiys  active  to  study  the  economic  question  at  is- 
sue, its  age  is  almost  coincident  with  the  present  de- 
cade. Every  year  until  1896,  the  year  of  writing,  has 
seen  a  multiplied  increase  in  the  territorial  as  well  as 
the  numerical  extent  of  the  agitation,  and  the  larger 
public  of  the  eastern  and  northeastern  states  are 
scarcely  yet  aroused  to  a  realization  that  something  of 
imperative  importance  is  occurring. 

One  book  written  in  popular  style  and  sold  id,  a  pop- 
ular price  has  so  much  impressed  the  people  who  are 
interested  in  the  questions  at  issue,  that  not  only  have 
there  been  sold  of  it  approximately  one  million  copies 
within  less  than  two  years,  but  it  has  commanded  tlie 
attention  of  writers  on  the  opposing  side  to  such  an 
extent  that  at  least  half  a  dozen  books  have  been 


i6  jlS  intboduotion  akd  a  zjbgend. 

written  with  the  avowed  object  of  rebutting  its  argu 
ments,  and  hundreds  of  newspaper  editors  devote  space 
in  their  columns  to  controverting  or  sustaining  the  asser- 
tions made  in  it.  There  is  no  argument  necessary  to 
prove  that  public  interest  justifies,  and  the  lack  of  such 
a  work  demands  a  book  which  shall  within  the  limits 
of  one  volume  give  in  convenient  form  the  arguments 
on  all  sides  of  the  controversy,  as  presented  by  the 
strongest  and  most  eminent  of  the  advocates. 

The  city  of  Chicago  has  become  the  center  of  the 
contest.  This  is  partly  because  of  its  location,  and 
partly  because  of  its  population.  Standing  as  it  does 
in  the  practical  commercial  center  of  the  United  States, 
the  largest  of  the  inland  cities,  its  situation  makes  it 
easily  accessible  to  the  people  of  all  parts.  It  is  in 
touch  with  the  west  and  south,  as  truly  as  with  the 
east  and  northeast,  and  between  these  divisions,  to  some 
extent,  have  the  lines  of  battle  been  fixed.  Its  popula- 
tion contains  representatives  of  all  sections.  Its  com* 
merce  is  quick  to  feel  any  movement  which  touches 
commercial  interests.  Its  newspapers  are  enterprising 
and  quick  to  give  space  to  questions  and  discussions  of 
rising  interest.  It  is  the  publishing  center  for  many 
books  dealing  with  this  and  all  other  questions  of  great 
or  small  interest.  These  things  must  explain  why  in 
the  discussions  that  are  to  follow,  citizens  of  Chicago 
seem  to  have  a  peculiarly  large  share  in  the  arguments. 
They  have  been  peculiarly  active  and  interested,  to 
study  and  write,  and  their  matter  has  but  its  just  and 
proper  proportion  of  space.  The  opening  discussion 
of  the  volume  is  one  of  the  most  important  verbal  pres- 
entations of  the  whole  subject  that  has  been  made  at 
any  time.    Immediately  following  it,  are  placed  several 


AN  INTBODUOTION  AND  A  LEGEND.       IT 

speeches  which  were  made  in  the  United  States  b^nate 
during  the  discussion  of  one  of  the  most  importaut 
measures  of  recent  years,  in  each  case  furnished  directly 
for  this  volume  by  the  senators  whose  names  they  bear, 
who  selected  them  as  in  each  case  being  the  presenta- 
tion of  the  subject  which  the  senator  would  now  choose 
to  make  for  public  reading.  From  that  point  in  this 
Tolume,  the  contributions  are  arranged  in  such  a  way 
as  to  make  what  seems  the  fairest  presentation  of  both 
sides.  Some  of  the  writings  are  made  directly  in  an- 
swer to  others,  while  some  are  entirely  independent  of 
any  matter  adjoining.  There  is  no  alternate  arrange- 
ment, placing  first  the  views  of  an  adherent  of  one 
school  and  then  of  the  other,  but  each  is  here  on  its 
own  merits,  placed  where  seems  most  appropriate  to  the 
harmony  of  the  whole.  That  the  result  may  be  the 
clarifying  of  the  economic  atmosphere  through  which 
many  sincere,  honest,  and  unsettled  inquirers  are  look- 
ing for  light,  to  enable  them  to  make  a  proper  decision 
as  to  their  own  course,  seems  not  an  unreasonable  hope. 
It  is  necessary  to  concede  honesty  of  intention  and 
purity  of  motive  to  every  writer  here,  or  else  to  pass 
him  by  as  unworthy  of  a  place. 

Once  upon  a  time,  so  the  legend  runs,  a  shield  hung 
at  the  side  of  a  highway,  along  which  knights  were 
wont  to  journey  as  they  rode  to  tourneys  and  to  jous* 
ting-meets.  It  was  so  swung  from  its  support  that  one 
side  of  the  shield  looked  down  the  highway  to  the  east, 
and  the  other  side,  as  would  naturally  be  the  case, 
looked  westward.  On  a  certain  fair  morning  in  spring, 
as  the  sun  was  rising  over  the  eastern  hills,  two  knightv 
armed  cap-^-pi^,  with  lances  in  rest  and  visors  raised 
oarae  near  to  one  another  down  the  road.     One  of  the 


IS  AK  INTRODrCTION   AND  A  UBQBXIK 

knights  was  dressed  in  chun  armor  of  silver  links,  and 
was  mounted  on  a  beautiful  white  charger,  which  seemed 
to  share  his  rider^s  spirit  and  bravery  The  other  kuiglit 
was  clothed  in  gold  mail,  and  proudly  sat  upon  a  fiery 
steed  of  ruddy  chestnut  hue,  almost  golden  in  its  bright- 
ness. And  the  golden  knight  approached  from  the 
eastward,  to  meet  his  fellow,  friend  or  foe  as  time  would 
tell. 

^^Good  morrow,  sir  knight,**  said  the  one  of  gold,  ^^it 
is  a  fair  and  bright  morning  wliile  we  ride.  When  ye 
pass  to  this  side  of  the  swinging  shield,  fail  not  to  turn 
and  look  how  yonder  sun  reflects  from  its  golden  face, 
and  dazzles  the  inquisitive  eye  that  would  read  its 
scription  and  admire  its  skilful  carving.  A  stranger 
knight  am  I  to  this  highway.  Can  ye  tell  to  me  the 
reason  why  the  shield  bangs  here  ?  " 

"  By  my  halidome,"  quoth  the  other,  "  I  cannot  tell, 
most  courteous  knight,  why  hangs  the  shield.  But 
sure  am  I  your  eyes  do  play  you  treason  in  the  sunlight's 
glare.  For  silver  is  it,  silver  as  my  armor  here,  and  ex- 
quisitely  bossed  and  graven.  Come  where  I  stand,  and 
see  the  silver  shine." 

"Now  do  you  mock  me,  sirrah,**  said  the  first. 
**  Know  I  not  gold  from  silver  in  the  eun  ?  Do  I  not  see 
with  eyes  that,  never  failed  ?  Is  not  the  sun  itself  in 
thine,  and  but  reflected  rays,  not  half  s:o  strong,  in 
mine?  Is  it  the  part  of  stranger  courtesy  to  thus 
dispute,  when  meeting  other  strangers  on  the  May  ?  I 
close  my  visor  to  a  face  so  false  I " 

And  saying  thus,  the  golden  knight,  with  scornful 
mien,  moved  forward  to  pass  on. 

"Hold!"  cried  the  silver  one,  with  face  aflame. 
**  No  man  shall  call  me  false  I    A  knight  I  am,  of  honox 


AN  INTRODUCTION   AND   A   LEGEND.  21 

■ 

proven  well,  in  many  a  tourney,  fought  in  many  lands 
Raise  now  your  lance  atilt,  and  lide  ye  hard,  or  you 
shall  roll,  full-armored,  in  the  dust." 

Then  rode  they  fast  together,  and  the  shock,  when 
under  that  fair  shield  they  met,  was  fierce.  Again 
they  turned  and  rode,  again  they  met.  They  fought 
until  their  lances  broke  in  twain.  They  fought  with 
swords,  when  lances  failed  them  both,  till  chargers 
tired  and  faltered  in  the  meeting.  They  fought  on 
foot  with  sword  and  then  with  mace.  They  fought  till 
morning  passed,  and  nooQ,  with  raging  heat,  eichausted 
them  the  more.  They  fought  throughout  the  quiet 
afternoon,  beneath  that  swinging  shield  above  their 
heads.  And  when  the  sun  was  sinking  in  the  west, 
illuming  now  the  other  shining  side,  both  fell  there  in 
the  highway  where  they  fought,  wounded,  exhausted, 
spent  of  blood,  and  dying.  As  these  two  knights  had 
met  in  battle  shock,  they  wavered  forward  now  and 
then  drew  back,  crossing  the  line  that  marked  the 
shield's  position,  and  shifting  often  each  his  own  at- 
tack. So  when  they  fell,  it  happened  that  the  knight 
of  gold  was  lying  farther  to  the  west,  and  he  of  silver 
on  the  eastern  side.  And  each  knight  raised  his  eyes 
to  see  the  shield  whose  metal  face  had  forced  him  to  a 
fight.  Then  he  of  silver  cried  aloud,  amazed,  "  What 
do  I  see  ?  A  shield  of  gold  it  is."  And  he  of  gold  in 
wonderment  replied,  "  Now  silver  is  it,  or  I  am  de- 
ceived." 

Then  struggled  they  from  where  they  fallen  were, 
despite  their  wounds,  their  weakness,  and  their  pride, 
each  to  his  former  point  of  view  again.  And  when 
they  realized  what  was  the  truth,  they  lifted  up  their 
voices  loud  and  wept,  that  such  a  fight  should  be,  and 
S 


S2  AK  INT£ODUCTION  AND  A  LBGBNIX 

such  a  fate,  for  gallaut  knights  to  face  when  both  were 
right  in  part  and  both  were  wrong.  Then  talked  they 
of  their  early  lives,  and  found  by  strange  adventure 
that  they  two  were  brothers.  One  mother  had  they, 
but  their  lives  had  been  apart  from  early  childhood, 
and  their  paths  had  spread  until  they  met  again  on  this 
dad  day. 

The  shield  that  hung  above  their  knightly  heads,  as 
hai^d  in  hand  they  waited  thus,  and  died,  was  golden 
on  the  side  that  faced  the  east  The  western  side  WM 
8ilv«r. 


SILYER  AND  GOLD. 


CHAPTER  I. 

THB  HABYET-LAUOHLIN  DEBATE. 

Of  all  the  spoken  arguments  on  opposing  sides  of 
the  curiency  question  during  the  early  months  of  1895, 
the  one  which  it  seems  proper  to  name  as  the  most  im« 
portant  was  the  Harvey-Laughlin  debate  of  May  17. 
For  three  hours  during  that  evening  these  eminent 
advocates  disputed  before  an  audience  composed  of  the 
most  prominent  men  of  Chicago,  and  many  of  national 
fame  from  other  cities.  Leading  business  men,  bank' 
ers,  economists,  clergymen,  and  educators  were  there, 
ready  to  hear  the  views  which  they  approved,  or  be 
convinced  if  facts  of  sufficient  weight  to  controvert 
previously  formed  opinions  were  presented  to  them. 
For  more  than  a  week  challenges,  counter  challenges, 
and  preliminary  negotiations  were  in  progress,  and 
when  at  last  it  was  atmounced  that  the  Illinois  club 
had  completed  arrangements  for  the  debate,  public  in- 
terest was  thoroughly  aroused,  and  applications  for 
seats  poured  in  by  the  thousand. 

The  personality  and  prominence  of  the  two  dispu* 
tants  were  the  cause  of  much  of  the  interest  which 
arose.  William  Hope  Harvey,  who  championed  the 
cause  of  the  free  coinage  of  silver,  is  the  author  of 

Ca8> 


21  SILVER   AND  GOLD. 

^  Coiirs  Financial  School/*  the  little  book  which  has 
set  the  west  on  fire  with  interest  in  the  fight.  From 
him  was  to  be  expected  the  most  conyincing  presenta- 
tion of  the  arguments  in  favor  of  his  position  that 
could  be  found  anywhere.  ISs  unpretentious  little 
volume,  but  one  out  of  several  which  he  had  written 
in  the  same  service,  has  roused  attention  in  the  columns 
of  almost  every  paper  in  the  land,  and  editorials  sus- 
taining or  controverting  it  are  constantly  offered  to  the 
public.  Prof.  J.  Laurence  Laughlin  holds  the  chair  of 
political  economy  in  the  great  University  of  Chicago, 
and  commands  attention  whenever  he  speaks  on  econo- 
mic questions.  To  this  educational  work  he  brought 
practical  experience  gained  in  a  business  career  before 
be  began  his  professional  life.  His  works  on  the  cur- 
rency question  are  known  wherever  the  question  arises, 
and  he  is  recognized  as  a  leading  authority  for  the 
views  of  those  who  maintain  opposition  to  the  free 
coinage  of  silver.  At  the  time  of  this  debate,  Prof. 
Laughlin  was  contributing  to  one  of  the  leading  daily 
newspapers  of  Chicago,  an  editorial  article  each  day,  in 
which  he  was  taking  up  the  chapters  in  "Coin's  Finan- 
cial School,"  seriatim^  and  answering  them  in  turn. 
The  disputants  were  therefore  well  matched. 

The  question  to  be  discussed  was  put  in  the  follow- 
ing form : 

Resolved,  that  the  United  States  should  at  once 
enter  upon  the  free  coinage  of  silver,  at  the  ratio  of  16 
to  1,  independently  of  the  action  of  any  other  nation. 

Of  course  Mr.  Harvey  maintained  the  affirmative  of 
this  proposition,  which  was  negatived  by  Prof.  Laugh-* 
lin.  It  was  a  feast  of  logic  and  a  flow  of  statistics. 
The  wall  behind  the  platform  was  covered  with  charts 


IHB   HABVEY-LAUGHLIN  DEBATE.  2S5 

and  diagrams  used  by  Professor  Laughlin  in  illustra- 
ting his  arguments  relating  to  the  relative  production 
and  quantity  of  gold  and  silver  in  the  world,  the  prices 
of  cereals  and  cotton  and  wages  at  various  periods,  and 
other  statistical  information  relating  to  the  subject 
under  discussion. 

It  was  8:16  o*clock  when  a  vigorous  clapping  of 
hands  announced  the  entrance  of  the  two  distinguished 
disputants,  Messers.  Laughlin  and  Harvey,  escorted  by 
President  H.  M.  Thomas.  As  they  ascended  the  plat- 
form there  was  a  renewal  of  applause.  President 
Thomas  seated  the  speakers,  Mr.  Harvey  on  his  right 
and  Professor  Laughlin  on  his  left.  President  Thomas 
at  once  stated  the  object  of  the  meeting,  and  introduced 
Mr.  Harvey  in  the  following  brief  manner : 

'^  There  is  probably  no  question  at  the  present  day  in 
which  there  is  such  widespread  interest,  such  general 
study  and  thought  as  that  of  the  financial  problem. 
Among  the  many  conflicting  views  and  statements 
which  are  presented  for  our  consideration  there  appears 
to  the  uninitiated  an  almost  hopeless  mass  of  statement 
of  facts  and  of  theories.  In  this  dilemma  the  Illinois 
Club  is  pleased  to  welcome  to  its  rooms  two  distin- 
guished students  of  finance.  Professor  Laughlin,  on  my 
left,  of  the  Chicago  University,  and  William  H.  Har- 
vey, on  my  right,  well  known  as  a  writer.  Mr.  Harvey 
will  open  and  will  have  one  hour,  if  he  so  desires.  Pro* 
fessor  Laughlin  will  follow  with  one  hour,  if  desired. 
Mr.  Harvey's  rejoinder  will  be  limited  to  fifteen  min- 
utes, Professor  Laughlin's  rejoinder  to  fifteen  minutes, 
and  the  closing  remarks  by  Mr.  Harvey  be  limited  to 
five  minutes.  It  is  my  pleasure  and  privilege  to  pre- 
sent to  you  William  H.  Harvey,  who  will  discuss  the 


M  SILVER  AND  GOLD. 

affirmative  of  this  question/'  In  his  addresa  Mr.  Har- 
vey said : 

^^Mr.  President,  Members  of  the  Illinois  Club  and 
Gentlemen  : — When  accepting  the  invitation  of  your 
committee  I  had  hoped  that  this  discussion  would  be 
on  fundamental  principles  and  facts,  thus  educational 
in  its  character,  and  later  on,  when  better  informed  as 
to  these,  we  would  reach  the  remedy.  I  felt  also  a 
keen  desire  to  get  at  Professor  Laughlin  on  the  unit  of 
value  existing  prior  to  1878  and  the  ^* crime"  of  that 
year,  two  points  on  which  he  has  been  misleading  the 
readers  of  The  Times-fferaliL  But  he  has  seen  fit  to 
decline  a  discussion  of  those  two  questions,  and  we  are 
to-night  to  take  up  the  remedy — the  last  question  cov- 
ered by  this  controvei*sy. 

*^  The  first  reason  why  I  am  in  favor  of  independent 
action  by  this  country  is  that  we  should  not  be  sub- 
jected to  the  influences  of  the  governments  of  Europe. 
When  our  forefathers  declared  their  political  independ- 
ence from  Europe  it  was  to  free  themselves  from  the 
class  legislation  of  those  governments,  justly  termed 
plutocracies.  If  the  people  can  be  reduced  to  poverty 
and  the  prosperity  of  the  United  States  can  be  ruined 
by  hanging  to  the  financial  policy  of  Europe,  then  we 
can  be  reduced  to  the  same  condition  by  financial  legis« 
lation  as  a  war  of  conquest  would  reduce  us. 

"  Our  friends  the  monometallists  say :  We  admit  bi- 
metallism would  be  good  if  we  could  get  international 
bimetallism.  In  other  words,  they  agree  that  there  is 
something  radically  wrong,  but  claim  that  we  are  tied 
to  the  financial  policy  of  Europe.  So  that,  if  a  war  of 
conquest  in  this  country  by  the  monarchies  of  Europe, 
whose  form  of   government  is  different  from  ours, 


THB  HABYET-LAUGHLIN  DBBATS»  27 

would  reduce  us  to  the  condition  that  the  people  of 
those  governments  are  in,  and  they  can  accomplish  the 
same  purpose  by  financial  legislation,  then  there  is  a 
necessity  for  independent  action. 

*^  Where  there  is  a  necessity  there  is  a  remedy.  Sup- 
pose you  were  to  say  to  a  man  of  common  sense,  ^  We 
are  compelled  to  adopt  the  financial  policy  of  Europe ;  * 
and  he  replied,  ^  The  country  is  going  to  waste  and 
ruin,  and  desolation  is  spreading  from  ocean  to  ocean,' 
and  demonstrates  that  the  cause  of  it  is  our  adoption 
of  the  financial  policy  of  Europe  and  we  say  back  to 
him :  *  It  makes  no  difference,  we  are  compelled  to 
adopt  the  financial  policy  of  Europe.'  This  answer 
would  not  be  acceptable  to  the  hard-headed  citizen  of 
this  country.  The  governments  of  Europe  are  plutoc- 
racies. They  squeeze  the  lemon  for  the  people  about 
every  so  often.  The  few  control  class  legislation  and 
the  masses  are  hewers  of  woods  and  drawers  of  water 
for  the  titled  few.  Like  the  farmer  who  goes  out  and 
robs  the  bees'  nests,  they  rob  the  people  and  then  give 
them  time  to  fill  the  nest  again  before  going  out  to  rob 
it  again. 

^^We  have  certainly  act  forgotten  the  history  giv- 
ing the  reasons  why  our  forefathers  established  this 
government — and  that  was  the  reason.  Now,  if  finan- 
cial legislation  is  one  of  the  classes  of  class  legislation 
by  which  the  many  are  robbed  and  the  few  are  en- 
riched, by  which  the  lemon  is  squeezed,  then  it  is  one 
of  the  institutions  of  the  European  governments  that 
we,  as  a  nation  of  people,  republican  in  form,  should 
declare  our  independence  of.  That  is  the  first  reason 
why  independent  financial  action  should  be  taken  by 
tile  United  States. 


28  SILVER  AND  GOLD. 

"If  they  say,  *We  must  have  the  same  money  that 
they  have  in  order  to  carry  on  business  with  them/ 
my  reply  is,  *  That  the  biggest  business  we  ever  did 
carry  on  with  the  balance  of  the  world,  and  particu- 
larly Europe,  was  the  time  when  they  had  gold  and  sil- 
ver  as  money  and  we  had  neither/  It  is  one  of  those 
peculiar  arguments  that  wears  its  way  into  a  man's 
brain  when  reiterated  and  monotonously  given  out  by 
the  daily  press  that  we  must  have  the  same  money 
that  the  other  great  commercial  nations  have.  We 
never  stop  to  investigate.  It  belongs  to  that  catalogue 
of  arguments  that  existed  prior  to  1492,  when  a  ma- 
jority of  the  people  of  the  world  said  that  the  world 
was  flat  and  a  few  men,  including  Columbus,  contended 
that  it  was  round. 

*'  Those  interested  in  purposely  cultivating  through 
ages  an  international  money  on  lines  marked  out  by 
them  have  the  same  possession  of  the  public  mind  as 
the  critics  of  Columbus  had,  and  those  who  coutend 
for  financial  independence  from  Europe  can  be  classed 
with  the  followers  of  that  great  navigator,  whose  minds 
were  in  advance  of  the  age  in  which  they  lived. 

"  This  nation  can  have  an  independent  financial 
system  without  any  reference  whatever  to  the  balance 
of  the  world,  and  can  carry  on  its  own  commerce  by 
ocean  and  by  land  with  the  other  governments  of  the 
world  notwithstanding.  We  do  not  now  settle  our 
balances  with  Europe  in  coin  except  on  its  commercical 
value  and  by  weight.  Our  coinage  has  nothing  to  do 
with  it.  Primarily  balances  of  trade  are  settled  with 
trade.  We  give  them  our  wheat  and  we  take  their 
silks,  anil  the  balance  that  we  may  owe  them  or  they 
may  owe  us  will  be  settled  just  as  merchants  between 


THE  HABVEY-LAUGHLIN  DEBATE.  29 

the  importing  points  may  agree  to  settle  it.  Thej  can 
settle  it  in  gold  for  so  much  a  pennyweight  as  measured 
in  the  money  of  their  country  or  our  country,  or  in  so 
much  silver  or  in  so  much  copper,  or  so  much  of  any 
other  merchandise  as  may  be  agreed  upon  between 
them  in  their  trade  relations. 

^^  There  is  no  such  thing  as  an  international  money. 
So  that  when  a  merchant  in  London  who  has  goods, 
and  vice  versa  with  a  merchant  in  New  York,  finds  at 
the  end  of  six  months  that  the  merchant  in  New  York 
owes  the  merchant  in  London  $50,000  as  measured  in 
the  American  coin,  whatever  it  is,  and  they  have  an 
understanding  by  which  the  New  York  merchant  is  to 
settle  those  balances,  and  it  may  be  in  wheat  or  it  may 
be  in  cotton  that  the  contract  would  be  settled,  any- 
thing that  would  be  in  a  general  way  agreed  upon :  but 
gold  or  silver,  irrespective  of  how  much  we  were  coin- 
ing of  it  as  money,  could  be  agreed  upon.  So  that  in 
the  beginning  of  a  study  of  this  question  that  point 
can  be  made  clear  to  the  mind  of  any  man  who  does  his 
own  thinking. 

^^  You  cannot  meet  arguments  that  are  purely  theo« 
retical,  such  as  a  man  proving  to  another  that  a  cat  has 
three  tails.  He  proves  it  this  way :  No  cat  has  two 
tails  and  one  cat  has  one  more  tail  than  no  cat,  there- 
fore one  cat  has  three  tails.  Profound  theorists  on  the 
other  side  of  this  question  are  not  especially  fond  of 
this  class  of  reasoning.  Growing  out  of  a  long-accus- 
tomed habit,  the  men  who  have  studiously  cultivated 
class  legislation  for  their  benefit  have  impressed  the 
common  masses  with  certain  apparent  fixed  principles, 
which  they  are  not  to  be  controlled  by,  and  one  of 
them  is  necessity  of  international  money,  just  as  they 


80  SILVER  AND  GOLD. 

have  made  you  believe  that  national  bank  money  was 
necessary. 

**  Now,  the  reason  behind  that  is  this :  They  can  go 
to  Washington  and  hypothecate  their  bonds,  draw  their 
interest  thereon;  get  a  loan  on  these  bonds  to  90 
per  cent,  of  their  face  value,  without  paying  any  in- 
terest, to  loan  it  to  you  at  from  7  to  12  per  cent. 
That  is  a  special  privilege.  And  we  have  learned  not 
to  blame  people  for  doing  these  things.  But  we  should. 
It  should  be  a  common  countrv,  conducted  for  the 
benefit  of  all  the  people. 

"  What  we  are  contending  for  is  the  opening  of  the 
mints  to  the  free  coinage  of  silver  (they  are  now  open 
to  the  free  and  unlimited  coinage  of  gold,  and  have 
never  been  closed  to  that  metal),  and  the  establishment 
of  bimetallism  on  those  simple  and  fixed  principles  that 
were  adopted  by  those  statesmen  who  had  in  view  the 
interest  of  no  class,  but  of  all  the  people. 

^^  What  we  want  is  bimetallism,  and  scientific  bimet- 
allism is  this : 

**  1.  Free  and  unlimited  coinage  of  both  gold  and  sil- 
ver ;  these  two  metals  to  constitute  the  primary  or  re- 
demption money  of  the  government. 

"  2.  The  silver  dollar  of  871 J  grains  of  pure  silver  to 
be  the  unit  of  value,  and  gold  to  be  coined  into  money 
at  a  ratio  to  be  changed  if  necessary  from  time  to  time 
if  the  commercial  parity  to  the  legal  ratio  shall  be 
affected  by  the  action  of  foreign  countries. 

^^  8.  The  money  coined  from  both  metals  to  be  legal 
tender  in  the  payment  of  all  debts. 

"  4.  The  option  as  to  which  of  the  moneys  is  to 
be  paid  in  the  liquidation  of  a  debt  to  rest  with  the 
debtor,    and    the    government  also  to  exercise  thftt 


THE  HABVEY  LAUQHLrN  DEBATE.  81 

option  when  desirable  when  paying  out  redemption 
money. 

^*  The  mints  are  now  open  to  the  unlimited  coinage 
of  gold.  Such  portion  of  the  product  of  that  metal  as 
does  not  find  an  immediate  demand  to  be  used  in  the 
arts  and  manufactures  is  taken  to  the  mints  and  coined 
into  money — into  money — and  becomes  at  once  the 
object  for  which  all  other  products  seek  the  market. 
It  thus  has  an  unlimited  market,  as  the  mints  are  open 
to  all  of  it  that  comes. 

**  This  was  true  also  as  to  silver  prior  to  1878,  but 
by  operation  of  section  21  of  the  act  of  that  year  the 
mints  were  closed  to  the  unlimited  coinage  of  that 
metal.  Hence,  when  silver  now  seeks  the  market  and 
exhausts  the  demand  supplied  by  the  arts  and  manu- 
factures and  the  small  purchases  of  the  government  to 
coin  it  into  token  money,  the  demand  for  it  ceases. 
Gold  has  an  unlimited  demand.  Silver  has  a  limited 
demand.  Silver  is  now  a  commodity  to  be  measured 
in  gold.  It  is  an  object  to  be  gored  and  kicked  by 
bulls  and  bears.  It  is  shut  out  from  the  United  States 
mint.  It  is  token  money.  It  has  been  deprived  of 
that  unlimited  demand  it  enjoyed  prior  to  1878. 

"We  would  restore  to  it  that  unlimited  demand. 
We  would  open  the  mints  to  it  again.  We  would 
leave  the  mints  open  to  gold  as  they  are  now.  We 
would  give  silver  the  same  privileges  as  gold.  Restor- 
ing to  it  tills  unlimited  demand  would  cause  the  value 
of  silver  to  rise  as  compared  with  gold.  This  is  what 
we  want.     This  is  what  we  would  do. 

"  We  would  again  make  the  standard  silver  dollar 
the  unit  of  value,  as  it  was  before  1873.  It  would 
thus  be  a  dollar,  and  the  bullion  in  it  would  be  wortk 


82  iftlLVER   AND   GOLD. 

a  dollar,  as  the  number  of  grains  of  bullion  in  a  dollar 
would  liave  the  right  to  walk  into  the  mint  and  be 
coined  into  a  dollar.  No  man  would  take  less  for  it 
when  he  could  have  it  coined  at  pleasure  into  a  dollar. 
We  would  make  gold  coins  of  the  value  of  so  many 
silver  units  or  dollars,  as  the  law  existed  prior  to  1873. 

"  Silver  is  the  people's  money.  It  was  so  regarded 
by  our  forefathers,  and  was  the  favored  metal  of  the 
two.  It  was  given  the  position  of  honor  in  the  coinage 
of  our  two  metals  by  having  the  unit  of  value  made 
from  it,  and  gold,  its  companion  metal,  measured  in  it. 
Gold  was  and  is  the  money  of  the  rich.  This  was  to 
be  a  government  of  the  people,  and  the  people's  money 
was  to  be  the  most  favored.  Twice  when  the  commer- 
cial ratio  between  the  two  metals  made  it  advisable  to 
change  the  legal  ratio,  the  change  was  made  by  reeoin- 
ing  the  gold  coins.  This  was  in  1834  and  1837.  The 
spirit  of  our  forefathers  then  lived  in  their  sons.  The 
gold  coins  were  changed  in  weight  and  size.  In  1834 
the  gold  eagle  had  twelve  grains  taken  out  of  it.  In 
1837  the  gold  eagle  had  two-tenths  of  a  grain  added  to 
it.  No  change  was  ever  made  in  the  quantity  of  pure 
silver  in  the  silver  unit.  There  were  to  be  no  two 
yardsticks.  The  rich  man's  money,  gold,  was  recoined 
when  the  commercial  ratio  changed  to  interfere  with 
the  legal  ratio.     This  is  the  law  we  would  re-enact. 

"  We  would  make  both  legal  tender  in  the  payment 
of  all  debts.  We  would  repeal  the  law  of  1873  and 
the  Sherman  law  of  1890  authorizing  contracts  (bonds, 
notes  and  mortgages)  to  be  taken  payable  in  gold  only. 
We  would  allow  no  discrimination  to  be  made  between 
the  legal  tender  character  of  the  two  metals.  We 
would  allow  no  private  individual  to  dictate  to  the 


THB   QABVEY-LAUGHLIN  DEBATE.  88 

government  what  its  legal  tender  money  should  be. 
We  would  place  the  white  metal  on  an  equal  footing 
with  the  colored  metal  without  regard  to  previous  con- 
dition of  race  or  servitude. 

"  We  would  give  the  option  to  the  debtor,  if  there 
was  any  preference  as  to  which  of  the  two  he  would 
use  in  the  payment  of  a  debt.  A  break  in  the  com- 
mercial parity  causes  the  cheaper  metal  to  be  used. 
This  increases  the  demand  for  the  cheaper  metal. 
This  increased  demand  restores  the  value  of  the  metal 
that  had  thus  fallen  below  a  parity  and  brings  it  back 
to  parity.  To  give  the  option  to  the  creditors  causes 
the  dearer  metal  to  be  demanded,  and  it  thns  grows 
dearer  and  dearer,  and  a  parity  is  permanently  broken 
and  the  gap  grows  wider  and  wider.  When  the  debtor 
has  the  option  the  two  metals  will  oscillate  close  to  a 
parity  and  substantially  at  a  parity.  This  oscillation 
is  the  elasticity  that  bimetallism  gives  to  primary 
money.  If  dhe  becomes  scarce  the  other  is  used.  If 
one  is  cornered  the  other  takes  its  place.  Either  an*' 
swers  for  money. 

^^  A  true  knowledge  of  bimetallism  and  the  simplic-' 
ity  of  that  system  died  with  our  ancestors.  Selfishness 
titalked  into  the  American  congress  at  a  time  when 
neither  metal  was  being  used  as  a  primary  money — 
our  primary  money  was  then  paper  money.  At  a  time 
when  corruption  was  rife  in  our  national  legislature, 
followed  by  articles  of  impeachment  against  Vice- 
President  Colfax  fur  complicity  in  the  Oakes  Ames 
aJBfair,  the  resignation  of  Secretary  of  War  Belknap 
for  bribery,  the  charge  of  corruption  against  numerous 
congressmen  in  connection  with  the  Credit  MobUier 
scandal  and  land  grant  swindles. 


84  SILVER  AND  GOLD. 

^  At  a  time  when  statesmanship  was  dwarfed  in  per- 
sonal selfishness  men  who  knew  what  the  effect  of  such 
a  change  in  our  financial  policy  meant  organized  sue. 
cessfully  the  first  trust  to  be  benefited  by  national  leg- 
islation in  this  country.  It  was  a  money  trust.  It 
was  the  demonetization  of  silver.  The  money  of  the 
people  was  destroyed.  Silver  at  that  time  was  at  a 
slight  premium  over  gold. 

^^  By  this  act  the  mints  were  closed  to  the  unlimited 
coinage  of  silver,  except  the  trade  dollar,  which  was 
overvalued  by  eight  grains  and  intended  only  for  ex- 
port to  China,  and  it  was  shut  off  by  the  act  of  1876, 
except  as  the  secretary  of  the  treasury  might  permit  it 
to  be  coined. 

^^  Silver  had  then  begun  to  fall,  as  measured  in  gold* 
and  the  breach  in  the  commercial  parity  of  the  two 
metals,  as  was  natural,  gradually  widened.  With  re- 
sumption  gold  asserted  its  importance  and  silver  corre- 
spondingly declined.  Under  the  Bland-Allison  act  of 
1876  creditors  began  to  make  their  notes,  bonds  and 
mortgages  payable  in  gold  to  the  exclusion  of  all  other 
forms  of  legal  tender  money.  This  increased  the  de- 
mand for  gold.  Silver  had  ceased  to  be  primary 
money.  It  had  taken  a  place  with  nickel  and  copper 
as  token  money,  all  redeemable  directly  and  indirectly 
in  gold.  That  elasticity  which  the  alternate  use  of 
silver  with  gold,  that  true  bimetallism,  gave  to  our  pri- 
mary money  was  now  absent.  If  the  demand  for  gold 
became  too  great  to  supply  the  normal  needs  of  pri- 
mary or  redemption  money,  there  was  nothing  to  take 
its  place  as  such.  Creditors  would  demand  the  dearest 
metal  and  the  law  had  given  them  the  right  to  do  so. 

^^  There  was  but  the  one  metal  to  which  the  mints 


THE  HAEVEY-LAUOHLIK  DEBATE.  86 

were  open — the  commercial  value  of  the  other  metal 
had  been  lowered  by  legal  discrimination  against  it 
Gold  was  carrying  the  silver  just  as  it  is  carrying  paper 
money.  Silver  was  not  permitted  to  take  the  place  of 
gold. 

"If  gold  was  cornered  neither  the  United  States 
treasury  nor  debtors  could  put  silver  in  competition  with 
it.  They  must  go  to  the  men  who  have  the  gold  and 
get  it,  and  submit  to  their  terms.  A  corner  on  beef 
cannot  seriously  threaten  the  health  of  the  people  of 
this  nation  so  long  as  mutton  and  pork  are  in  compe- 
tition with  it.  A  corner  on  gold  could  not,  as  it  does 
now,  seriously  threaten  the  credit  of  this  nation  if  sil* 
ver  was  in  competition  with  gold  as  primary  money. 

**  What  is  the  remedy?  Shall  we  follow  Mr.  Cleve- 
land and  Mr.  Sherman  and  such  party  leaders  any 
farther?  They  have  led  us  into  a  swamp,  and  the  miro 
is  getting  deeper  and  deeper ;  we  are  sinking  in  the 
mud  and  slush  more  and  more,  with  an  abyss  and 
oblivion  beyond.  Speaking  of  these  two  party  leaders 
reminds  me  of  the  good  old  Methodist  woman  who  was 
invited  by  a  Presbyterian  woman  friend  to  go  to  her 
Presbyterian  church  to  hear  a  Presbyterian  preacher. 
Well,  when  they  got  there,  they  took  seats  up  in  the 
Amen  corner,  and,  to  the  surprise  of  the  good  old 
Methodist  woman,  she  found  that  the  Presbyterian 
preacher  could  preach  a  real  soul-stirring  sermon,  and 
she  expressed  her  satisfaction  by  saying  *  Amen ! ' 
This  attracted  the  attention  of  the  Presbyterian  dea- 
cons, and  they  commenced  looking  cross-eyed  at  her. 
But  the  sermon  grew  better  and  better,  and  the  Metho* 
dist  woman  was  soon  crying  ^Hallelujah  I  ^  The  dignity 
of  the  Presbyterian  deacons  was  shocked.     From  cry- 


«6  SILVER  AND  GOLD. 

ing  *  Hallelujah '  the  good  old  Methodist  woman  soon 
got  to  clapping  her  hands  and  shouting.  This  was  too 
much  for  the  deacons,  and  two  of  them  took  hold  of 
her  and,  picking  her  up,  carried  her  out  of  the  church. 
As  they  passed  down  the  aisle  with  her,  she  exclaimed. 
*  I  cannot  stand  the  honor,'  and  repeated  this  state- 
ment several  times,  ^I  cannot  stand  the  honor.'  The 
curiosity  of  the  old  deacons  was  excited  to  know  what 
she  meant,  and,  when  they  put  her  down  in  the  vesti- 
bule of  the  church,  they  asked  her  why  she  had  said 
what  she  did.  She  replied :  *  Christ  rode  out  of  Jeru- 
salem on  one  donkey,  and  I  have  ridden  out  of  this 
church  on  two.' 

'^  Let  us  have  nothing  more  to  do  with  the  men  who 
have  assisted  in  tying  the  hands  of  this  great  nation 
and  delivering  its  financial  policy  over  to  the  gold  gam- 
blers of  the  world.  The  bank  of  the  Rothschilds  in  En- 
gland is  now  behind  the  United  States  treasury.  They 
are  our  financial  agents  ;  our  financial  managers.  We 
are  paying  them  the  princely  salary  of  f 8,000,000  for 
each  six  months  of  their  valuable  services.  It  requires 
special  pleading  to  defend  this  transaction  and  the  cir- 
cumstances which  have  led  up  to  it.  You  will  hear 
some  of  that  special  pleading  to-night  from  the  gentle- 
man who  is  to  follow  me.  We  are  now  in  the  hands  of 
the  pawnbrokers  of  Europe.  They  will  take  the  same 
care  of  us  that  the  spider  did  with  the  fiy. 

"  We  have  very  little  gold  left  in  this  countiy.  We 
are  a  debtor  nation  and  our  people  and  corporations 
are  heavily  in  debt  to  the  people  in  England,  and  the 
interest  on  what  we  owe  them  amounts  to,  annually, 
about  $250,000,000,  payable  in  gold.  They  demand 
gold.    The  contracts  call  for  it  in  gold.    To  pay  this 


WILLIAM  H.  HAKVliy. 


THE  HABVEY-LAUGHLIN  DEBATE.  89 

ire  have  a  balance  due  us  in  trade  with  Europe  of  about 
1100,000,000.  That  leaves  1150,000,000  still  left  to 
pay  them.  How  do  we  pay  it  ?  We  produce  about 
$40,000,000  in  gold  yeaily.  We  give  them  that.  This 
leaves  about  $100,000,000  still  due  them.  How  do  we 
pay  it?  Out  of  the  reserve  stock  of  gold.  With 
them  getti.ig  all  our  money  represented  by  the  bal- 
ance due  us  on  exports  and  all  our  annual  production 
of  gold,  and  $100,000,000  annually  from  our  reserve 
stock  of  gold,  how  long  is  our  reserve  stock  of  gold  to 
last? 

"How  are  we  to  replenish  it?  There  is  only  one 
way.  That  is  to  borrow  it  from  those  who  have  it,  and 
that  means  England.  And  that  is  what  we  are  doing. 
That  means  more  interest,  more  gold  annually  to  be 
paid  to  England.  Where  will  it  end?  It  means  the 
'dismal  swamp '  and  *  hell's  half  acre  '  beyond. 

"  This  is  what  having  a  gold  standard  means.  A 
primary  money  without  the  elasticity  that  two  metals 
give.  The  rich  man's  money.  A  money  that  is  easily 
cornered  ;  that  cau  be  physically  cornered ;  cornered  in 
this  room — all  of  it — all  there  is  in  the  world.  A  dol- 
lar from  it  is  the  size  of  a  drop  of  water,  so  small  that 
by  act  of  congress  of  Sept.  26,  1869,  its  further  coin- 
age has  been  prohibited.  We  now  have  a  unit  of  value 
so  small  as  to  be  impracticable  for  use ;  that  cannot  be 
coined  into  money  the  size  of  a  poor  man's  transaction. 
This  is  not  now  a  poor  man's  government. 

"  How  are  we  to  pay  these  debts  to  England  ?  Re- 
pudiate them  ?  No  I  Robbers'  dollars  as  they  are,  let 
us  pay  them.  Result  of  a  conspiracy  played  on  us 
while  we  slept,  yet  let  us  pay  them.  If  we  don't, 
Lyman  J.  Gage  or  Russell  Sage  will  say  we  are  die- 
8 


40  SILVER  AND  GOLD. 

honest.  They  will  never  say  the  other  fellow  ia 
dishonest.  He  wears  good  clothes,  looks  impor- 
tant and  owns  a  newspaper.  But  how  are  we  to  pay 
these  debts  to  England  ?  It  is  this  way  :  Restore  sil- 
ver ;  put  it  in  competition  with  gold  on  a  legal  ratio  of 
16  to  1.  Repeal  all  laws  allowing  a  discrimination  be- 
tween the  two  metals ;  stop  gold  notes  from  being 
taken.  Put  silver  in  competition  with  gold  as  quickly 
as  possible.  Where  gold  contracts  do  not  exist  silver 
will  go  at  once  into  competition  with  gold  and  this  will 
take  some  of  the  demand  off  of  gold.  To  that  extent 
it  will  lower  the  value  of  gold.  The  extra  demand  for 
silver  will  raise  its  value.  Everything  will  advance  in 
value  at  once.     The  Tribune  admits  that. 

"As  silver  advances,  the  silver  England  is  now 
buying  from  us  to  ship  to  India  ($15,000,000  last  year), 
to  buy  wheat  and  cotton,  will  cost  her  more.  India 
wheat  and  cotton  that  she  buys  with  silver  will  cost  her 
that  much  more.  A  farmer  in  India  wants  an  ounce 
of  silver  for  a  bushel  of  wheat.  At  free  coinage  that 
ounce  of  silver  is  $1.29.  That  means  that  if  England 
pays  us  $1.29  for  an  ounce  of  silver,  wheat  from  India 
will  cost  her  $1.29  per  bushel.  Then  she  will  pay  us 
S1.29  per  bushel  for  our  wheat.  She  now  buys  silver 
from  us  at  65  cents  per  ounce  and  buys  wheat  and  coin 
ton  with  it  in  India,  and  we  must  compete  with  that 
price. 

"  When  our  silver  advances  and  the  price  of  all  our 
products  advance  and  wheat  and  cotton  go  back  to 
their  old  price,  we  will  be  more  than  able  to  pay  our 
debts.  Our  balance  in  trade  wUl  be  $200,000,000  in- 
stead of  $100,000,000,  and  this  will  only  leave  us  $50- 
000,000  to  pay  the  balance  we  owe  England  annually. 


THE  HAEVEY-LAUGHLIN  DEBATE.  41 

The  only  way  to  pay  England  is  to  advance  prices  per- 
manently, not  spasmodically,  as  is  now  being  done  on  a 
few  articles. 

"  We  are  now  getting  drunk  on  more  money  bor- 
rowed from  England.  Fifty  million  dollars  on  railroad 
bonds  last  week.  The  relapse  will  be  worse  than  the 
lasir  attack.  But  Ihcy  say  gold  will  leave  us,  and  will 
go  out  of  sight,  and  how  are  we  to  get  it  to  pay  our 
gold  debts  ?  We  are  now  paying  100  per  cent,  pre- 
mium for  it  with  our  silver  and  about  the  same  pre- 
mium on  it  in  wheat,  cotton  and  other  products. 
When  we  have  put  silver  in  competition  with  gold, 
the  premium  cannot  possibly  be  that  much.  If  when 
our  mints  are  open  to  silver,  gold  is  held  at  25  per 
cent,  premium^  it  will  mean  that  we  have  taken  75  per 
cent,  of  the  present  premium  out  of  it,  as  it  now  takes 
the  silver  in  two  silver  dollars  to  buy  one  of  them.  It 
will  then  only  take  one  and  a  quarter  of  one  of  our  sil- 
ver dollars  to  buy  one  gold  dollar,  and  it  will  take  less  of 
any  of  our  other  property  to  buy  gold  than  it  does  now. 

"  It  is  foolish  to  say  that  when  silver  is  in  competi- 
tion with  gold  that  gold  will  cost  no  more.  As  in  the 
former  illustration,  as  well  say  that  beef  will  go  higher 
by  putting  pork  and  mutton  in  competition  with  it. 
As  we  get  these  gold  debts  paid  oflf  we  will  be  more  in- 
dependent. We  can  show  gold  that  we  do  not  depend 
on  it  for  money.  It  will  then  be  our  slave.  It  is  now 
our  tyrant.  It  will  then  come  back  and  beg  us  to  take 
it  as  in  1878,  when  it — one  of  these  gold  dollars — ^was 
worth  two  cents  less  than  a  silver  dollar.  The  more  im- 
portance we  place  on  it,  the  more  we  will  have  to  pay 
for  it ;  the  less  importance  we  attach  to  it  the  less  we 
will  have  to  give  for  it. 


42  SILVER  AND  GOLD. 

'^  If  a  man  suddenly  finds  himself  floundering  in  the 
middle  of  a  stream  the  quickest  way  out  is  to  strike 
out  for  the  nearest  shore.  The  quickest  way  out  of  the 
present  situation  is  to  leave  the  mints  as  they  are,  open 
to  the  free  and  unlimited  coinage  of  gold  and  throw 
them  open  to  the  free  and  unlimited  coinage  of  silver 
at  the  ratio  of  1  to  16  as  full  primary  redemption 
money.  And  why  the  ratio  of  1  to  16?  Because  that 
was  the  ratio  when  the  trick  was  played.  A  great 
wrong  has  been  committed  and  to  right  that  wrong  is 
the  first  thing  to  do. 

"  With  the  mints  of  this  great  nation  open  to  the 
free  and  unlimited  coinage  of  silver  a  demand  has  been 
created  sufficient  to  absorb  all  the  surplus  silver  in  the 
world  if  it  wishes  to  unload  upon  us.  How  much  sil- 
ver is  there  in  the  world  ?  As  expressed  in  dollars 
there  is  $4,000,000,000  of  it  available  for  use  as  money. ' 
As  expressed  in  bulk  it  is  the  cube  of  sixty  six  feet. 
It  will  all_go  in  the  room  of  the  First  National  Bank  of 
this  city  and  the  basement  thereunder. 

"  Now,  we  will  pull  the  throttle  valve  ;  we  pass  the 
act  of  remonetization.  The  mints  are  thrown  open  as 
they  were  prior  to  1873.  Now,  what  is  the  result?  It 
would  be  like  an  engine  starting  oflP  on  a  rough  track 
to  start  with,  probably.  Here  would  come  the  silver  of 
the  world,  we  will  say,  to  take  our  gold  away :  *  You 
fellows,  have  overturned  silver.  We  are  willing  to 
swap  with  you  ;  we  will  give  you  our  silver  and  take 
your  gold.'  Well,  here  they  come  with  it.  How  are 
they  going  to  give  us  their  silver  ?  They  give  us  silver 
toT  our  gold.  How  much  would  they  get  and  how 
much  would  they  give  us  ?  At  the  present  time  there 
is  probably  about  $400,000  000  of  gold  in  the  United 


N 


THB   HARVEY-LAUGHLIN  DEBATE,  48 

States.  It  is  only  a  very  small  sum  compared  with  the 
necessities  of  the  country.  Now,  suppose  they  got  all 
of  our  gold  ?  What  would  they  do  with  it  ?  Would 
they  eat  it  ?  Is  there  anything  sacred  about  gold,  or 
silver,  either,  except  for  the  use  of  the  arts  and  manu- 
factories and  for  their  desirability  to  use  as  money  ? 
Now,  they  want  to  bring  us  the  balance  of  their 
silver. 

"  What  do  we  give  them  for  it?  We  give  them  our 
products.  Sliips  are  coming  into  our  harbors  from  all 
portions  of  the  world  bringing  us  the  silver  of  the 
world — this  66  feet.  (I  am  taking  an  extreme  view  of 
it — a  monometallist's  view  of  it.)  And  they  are  go- 
ing back  with  the  products  of  our  spindles  and  looms 
and  of  our  fields.  They  have  got  our  products  and  we 
have  got  their  silver. 

"  We  can  go  to  work  and  raise  the  same  products 
nex't  year  over  again  and  tell  them  to  bring  some  more 
of  it  if  they  have  got  it.  They  bring  us  all  their  sil- 
ver and  they  have  found  out  that  we  have  got  enough 
to  give  them  for  it.  In  other  words,  the  United  States 
is  big  enough  when  she  throws  her  mints  open  to  the 
free  coinage  of  silver  to  take  all  the  silver  in  the  world, 
and  give  up  her  products  in  payment  for  it ;  and  such 
a  nation  can  fix  the  ratio  between  gold  and  silver. 
They  could  find  ships  enough  to  bring  it  to  us.  Two 
ships  would  carry  it  all.  The  products  for  this  country 
for  a  single  year  would  take  it  all.  And  we  could  still 
say :  '  Come  on.     We  have  more  to  sell  you.* 

"Such  a  thhig  would  put  our  manufactories  at  work. 
There  would  be  no  idle  labor  in  the  United  States  in 
ninety  days  after  the  monometallists  tried  that  game 
on  us.     There  is  only  *1,400,000,000  of  silver  in  the 


44  SILVER  AND  GOLD. 

world  that  is  not  in  the  coins  of  the  established  govern* 
ments. 

"  It  would  be  the  very  best  thing  that  could  happen 
to  this  country  if  we  could  trade  what  is  claimed  to  be 
$600,000,000  of  gold  in  this  country  (but  in  truth  less 
than  1400,000,000)  for  all  the  silver  in  the  world.  It 
is  just  as  good  as  money.  It  is  an  erroneous  idea  to 
stand  gold  up  and  worship  it  as  a  great  god.  There  is 
nothing  in  it  except  its  use  in  the  arts  and  its  use  as 
money,  and  you  have  been  impressed  with  its  use  of 
money  simply  because  it  has  been  impressed  upon  you. 

"•  You  don't  have  to  carry  silver  around  with  you. 
You  don't  carry  gold  around  with  you.  We  carry 
more  silver  than  we  do  gold.  You  carry  a  paper  sub- 
stitute to  represent  it.  Gold  would  immediately  come 
back  and  knock  at  our  door.  (I  mean  if  this  happened. 
I  don't  admit  it  will  happen,  because  I  won't  say  that 
the  balance  of  the  world  are  fools  enough  to  give  us 
their  silver.) 

"  What  I  say  will  happen  will  be  this:  When  a  great 
government  like  the  United  States  says:  'Here  is 
equal  exchange,  16  for  1,  gold  for  silver,'  a  man  in 
France  is  not  going  to  part  with  his  silver  or  gold  un- 
less he  gets  that  much  for  it ;  unless  he  gets  as  much 
for  it  as  the  United  States  will  pay  for  it,  less  the  cost 
of  exchange. 

"  So  that  when  a  government  that  is  big  enough  to 
take  all  the  silver  in  the  world,  if  it  wants  to  test  its 
capacity,  a  demand  is  created  by  an  influence  that  is 
able  to  sustain  that  demand,  so  that  a  man  nowhere  in 
the  world  is  gtang  to  sell  his  silver  for  gold  for  any  less 
than  he  can  get  for  it  in  the  United  States.  But  we 
will  not  have  to  go  to  it  alone.     Mexico,  Central  and 


THE  HABV£Y  LAtJGHLIK   DEBATB.  45 

South  America  are  already  w  ith  us  when  we  start.  We 
start  with  one-half  of  the  world  geographically ;  all 
bonded  together  in  sympathy.  The  reason  why  Mexico 
and  the  South  American  governments  cannot  go  it 
alone  is  because  they  are  small  commercial  guvern- 
nients.  Europe  and  the  United  States  are  too  much 
for  them.  The  enormous  demand  made  for  gold  by  the 
enormous  commercial  transactions  of  Europe  and  the 
United  States  makes  a  demand  for  gold  that  the  gov- 
ernments of  Mexico,  South  America  and  China  and 
Japan  are  not  equal  to  overcome.  So  that  the  United 
States,  when  she  would  start,  would  have  the  assistance 
of  these  weaker  governments  with  her. 

"  France  said  to  the  United  States  at  the  inter- 
national conference  in  1876,  *we  come  here  to  hear 
your  proposition  and  to  follow  you  ;  all  you  have  got 
to  do  is  to  start.' 

"  France  has  been  enforcing  the  bimetallic  system 
and  refusing  to  pay  out  except  half  and  half,  saying  to 
us:  *  We  are  waiting  on  you,  open  your  mints  and  we 
will  follow.'  So  we  would  start  with  the  western  hemi- 
sphere, with  China  and  Japan  on  the  eastern  hemi- 
sphere, and  with  France  with  the  United  States,  two 
of  the  greatest  governments  in  the  world.  When  the 
nations  of  the  world  that  give  importance  to  silver 
have  a  commercial  influence  as  great  as  those  nations 
which  give  importance  to  gold,  the  commercial  parity 
between  the  two  metals  will  settle  itself.  England  de- 
monetized silver  in  1816,  and  yet  there  was  a  commer- 
cial parity  maintained  at  rates  fixed  from  that  time  to 
1873.  The  United  States,  France  and  the  Latin  union 
had  their  mints  all  open  to  silver,  and  England,  stop- 
ping the  free  coinage  of  silver,  had  no  effect  upon  it. 


46.  SILVER   AND   GOLD. 

So,   if  we   begin,  we   begin  strong   enough  to  do  it 
*  The  way  to  resume  is  to  resume.' 

"  The  way  to  remonetize  is  to  throw  our  mints  open 
and  we  have  got  it.  We  will  have  higher  prices  once 
more.  Everybody  can  ixiake  some  money.  There  isn't 
that  paralyzed  and  deadly  feeling  that  comes  with  tbe 
destruction  of  prices  and  tlie  hoarding  of  money. 
Now,  suppose  that  the  gold  does  still  leave  us  and  you 
want  to  stop  it.  You  don't  need  it  in  settling  with  a 
foreign  country.  We  demonstrated  that  during  the 
war.  because  a  man  can  go  and  buy  it  at  whatever  it 
will  cost  in  order  to  pay  it  in  settlement  of  liis  balance 
of  trade.  Our  trade  with  foreign  nations  is  only  4  per 
cent,  of  our  business,  and  our  domestic  business  is  96 
per  cent,  of  all  our  business.  Which  do  you  want 
legislated  in  the  interest  of,  the  96  per  cent,  or  the  4 
per  cent.  ? 

"  But  suppose  you  keep  the  gold  and  have  gold  and 
silver  both  circulating  among  us.  Gold  doesn't  circu- 
late now ;  but  suppose  we  wanted  to  keep  them  on  a 
commercial  parity  and  found  that  the  conditions  that  I 
have  described  didn't  do  il,  how  would  you  do  it?  The 
first  thing  would  be,  how  can  we  increase  the  demand 
for  silver  ? 

"  Well,  it  might  be  done  two  or  three  ways.  In  the 
first  place  we  would  send  a  commission  or  several  com* 
missions  to  Germnny  and  say  to  those  people,  '  Here, 
we,  the  great  United  States,  have  begun  the  work  of 
declaring  emancipation  for  the  human  race  from  these 
burdens  that  are  upon  them,  and  we  want  to  add  our 
argument  to  the  arguments  of  your  able  bimetallists 
here  in  Berlin ;  we  want  you  to  come  in  with 
us/     Wouldn't  it  have  some  effect?      Would  it  not 


THE  H AR VEY-LAUGHLIN  DEBAT^    '  r  r  >  -f? 

have  more  e£Fect  than  to  lay  back  like  dogs  in  the 
manger  as  we  are  doing  now?  She  could  be  per- 
suaded possibly,  with  the  influence  of  her  other  biniet- 
allists,  so  that  we  could  go  on  in  that  missionary  work, 
launched  on  a  gigantic  scale  as  it  would  be,  until  we 
had  back  ail  of  the  governments  of  the  world  where 
we  were  prior  to  1873,  except  England.  We  don't 
want  her  at  all.  You  are  not  going  to  get  her  either. 
I  would  just  as  soon  go  to  England,  to  the  men  who 
mold  legislation  in  England,  and  ask  them  to  give  us 
bimetallism  as  I  would  to  go  to  the  rankest  gold-bug 
in  Wall  street  as  ask  him  to  go  down  and  persuade 
Mr.  Cleveland  to  turn  over  to  us. 

"  Why?  Man  is  moved  by  selfish  motive,  unless  he 
has  freed  himself  from  those  base  instincts,  and  large 
money  makers,  who  have  long  since  gotten  more  than 
they  needed  in  this  world,  and  are  still  piling  up  more 
for  the  purpose  of  saying  that  ^  I  am  the  richest  man 
in  the  world,'  or  that  *  I  am  richer  than  my  neighbor, 
and  so  my  wife  can  say  that  she  is  richer  than  Mrs. 
Smith/  When  you  strike  a  man  like  that,  and  that  is 
the  kind  of  man  you  strike  when  you  go  to  England, 
who  control  legislation  there,  there  is  a  selfish  motive 
for  their  ncionometallism,  and  it  is  because  they  are  the 
creditor  nation  of  the  world. 

"  All  the  world  owes  them  money,  and  what  is  the 
use  of  commerce  ?  It  is  the  exchange  of  property ; 
property  for  property,  property  for  money,  and  money 
for  property,  and  England  can  exchange  her  gold  that 
you  owe  her,  and  all  the  world  owes  her,  for  twice  as 
much  of  your  property  as  she  could  if  we  had  bimet- 
allism. In  round  numbers,  there  are  so  many  silver 
dollars  in  the  world  as  gold  dollars.     The  statistics  will 


48  BILVEB  AKD  QOLD. 

show  you  that  there  is  a  very  slight  difference,  an 
equal  amouut  of  each,  dollar  for  dollar,  free  coinage 
prices ;  and  when  you  add  silver  to  gold  as  primary 
money  prices  advance,  and  England's  gold  would  then 
have  its  value  taken  out  of  it,  and  it  would  have  to  pay 
twice  as  much  for  our  property.  Now,  that  is  the 
reason  she  don't  want  to  do  it. 

*^  If  an  undue  and  unrighteous  influence  by  schemers 
and  tricksters  abnormally  enhance  the  value  of  gold 
so  that  a  commercial  parity  at  16  to  1  cannnot  be 
maintained,  then  do  as  our  forefathers  did— change  the 
ratio  and  make  the  change  in  the  weight  and  size  of 
the  gold  coins.  Monroe  and  Jackson,  did  it.  They 
were  not  called  dishonest  for  doing  so.  They  were 
legislating  in  the  interest  of  the  people,  and  not  in  the 
interest  of  the  favored  few.  We  are  not  compelled  to 
keep  the  legal  ratio  at  16  to  1 ;  we  can  change  it  to  20 
to  1  if  necessary  to  fix  the  legal  ratio  to  correspond 
with  the  commercial  r^tio,  but  if  the  change  is  made 
let  us  make  it  in  the  rich  man's  money  and  not  in  the 
poor  man's  money.  .  To  lessen  the  size  of  the  gold 
coins  makes  more  dollars.  To  increase  the  size  of  the 
silver  coins  makes  less  dollars. 

'^  Let  us  have  more  dollars  rather  than  less  dollars. 
A  parity  at  the  same  ratio  is  practicable,  as  admitted 
by  the  experience  of  ages.     This  is  what  we  ask. 

^*  This  is  a  question  of  capital  on  one  side  and  hu- 
manity on  the  other.  Of  sound  money — the  sound  of 
the  clod  of^  the  coffin — on  one  side,  and  sound  money 
— ^the  sound  that  has  the  honest  ring  of  the  people's 
money  in  it — on  the  other  side.  It  is  a  question  of  an 
English  policy  or  an  Amercian  policy.  Which  shall  it 
be? 


THE  HABVEY-LAUGULIN  DEBATE.  49 

PROFESSOR  LAUGHLINS  ARGUMENT. 

When  Mr.  Harvey  had  finished,  the  moderator  in  a 
few  words  presented  Professor  Laughlin  as  the  advo- 
cate of  the  negative  of  the  question.  The  teacher  of 
political  economy  said : 

^^I  supposed,  gentlemen,  that  we  should  discuss  here 
to-night  the  question  whether  the  United  States  should 
adopt  the  free  coinage  of  silver  at  the  ratio  of  16  to  1, 
independently  of  other  countries.  I  have  not  heard  to- 
night any  argument  directed  to  that  point.  An 
attempt  has  been  made  to  lead  the  discussion  far  off  on 
the  question  of  what  the  unit  was  from  1793  to  1873, 
but,  to  borrow  an  expression  from  our  friend  Tom  Reed, 
*that  fly  was  embalmed  in  the  rhetoric  of  Judge  Vin- 
.  cent.'  It  is  not  necessary  for  us  to  go  into  that  ques- 
tion. 

"  The  persistence  with  which  that  point  is  referred 
to  reminds  me  of  the  backwoodsman  who  pointed  out 
the  bear  to  his  friend — the  bear  being  up  the  tree — and 
aimed  his  gun  at  it.  And  the  other  fellow  could  not 
see  the  bear,  and  his  friend  was  pointing  at  it  and  say- 
ing, *  don't  you  se^it?'  And  it  finally  became  neces- 
sary jto  do  something  and  he  said  again,  ^  Why,  don't 
you  see  it?  *  His  friend  said,  *  Why,  no.'  And  then  he 
went  over  to  his  friend  who  thought  he  saw  a  bear,  and 
it  was  a  flee  on  his  eyebrow. 

'^  I  should  like  for  a  moment  or  two  to  free  ourselves 
from  the  obscuration  of  that  mighty  animal  directly 
before  our  eyes,  and  get  at  some  of  the  especial  points 
of  the  question.  Before  commencing  on  those  subjects, 
I  should  like  to  speak  briefly  of  three  or  four  points  in 
correction  of  the  argument  of  the  gentleman  preceding. 


60  SILVER  AND  GOLD. 

"  He  spoke  of  the  fact  that  there  was  greater  trade 
with  Europe  during  the  times  when  there  was  a  freer 
coinage  of  gold  and  silver  than  since  1878.  I  have 
turned  to  the  statistical  abstract  of  the  United  States 
for  1894,  and  find  that  in  1872  the  gross  sum  of  both 
exports  and  imports  of  the  United  States  was  $1,164,- 
000,000;  .in  1894,  $1,547,000,000.  Certainly  that 
statement  is  not  accurate.  Also  the  statement  was 
made  that  we  paid  for  our  foreign  goods  by  constant 
drain  on  our  resources  of  gold. 

"  I  happen  to  have  here  at  my  hand  a  chart,  which 
possibly  you  can  see,  which  shows  a  comparison  of  the 
ratio,  representing  in  the  green  squares  the  total  amount 
of  exports  and  imports  in  our  foreign  trade  from  1850 
to  the  present  time,  and  the  ytellow  square  indicates  the 
relative  amount  of  gold  and  silver  both  that  passed  out 
and  in  to  settle  all  those  balances.  That,  gentlemen, 
is  the  way  in  which  the  payment  for  our  goods  is  made 
in  foreign  trades — not  by  the  shipment  of  money,  ex- 
cept in  small  sums,  at  particular  times. 

"  Another  point  I  should  like  to  call  attention  to, 
which  has  occurred  before,is  in  reference  to  the  fact  that 
the  Bland  act  of  1878  and  the  Sherman  act  were  sup- 
posed to  require  certain  obligations  in  securities  to  be 
paid  in  coin.  What  seems  to  be  that  statement  in  the 
act  of  1878  is  that  silver  dollars  shall  be  a  legal  tender 
for  all  debts,  public  and  private,  except  where  other- 
wise expressly  stipulated  in  the  contract.  It  is  possi- 
ble that  people  who  demand  the  free  coinage  in  the 
ratio  of  16  to  1  would  naturally  prevent  you  or  any 
other  business  man  in  this  city  from  making  an  express 
stipulation  for  gold  or  any  other  article.  It  seems  al- 
S       most  inconceivable  to  one  that  the  law  of  1878  would 


TUE   HARVEY-LAUGHLIN   DEBATE.  61 

bear  any  such  interpretation,  and  that  is  the  only  quo- 
tation that  could  possibly  be  so  construed. 

*^It  seems  to  me  unnecessary  to  go  further  on  this 
question,  except  to  point  out  here  one  thing  more  be- 
fore I  begin — that  we  are  supposed  to  be  people  who 
maintained  gold  and  silver  at  a  parity  previous  to  1873, 
and  that  this  was  done  by  the  free  coinage  of  both  gold 
and  silver.  Reference  has  been  made  to  France.  Now, 
we  know  that  in  1803  the  French  law  established  silver 
as  the  unit  of  measure.  It  was  supposed  that  tliey  had 
concurrent  circulation  of  both  gold  and  silver  in  France 
from  1803  down  to  the  time  of  the  discovery  of  gold  in 
1860.     That  is  absolutely  untrue. 

"  I  quote  from  an  oflScial  docuiucnt  issued  by  the 
French  government  in  1872  on  page  662,  in  volume  2. 
This  document  says  that  in  1808  the  circulation  in 
France  was  only  about  8,000,000  of  gold— that  is 
francs— and  2,000,000  of  silver.  In  1838  the  whole  of 
the  French  circulation  did  not  include  over  6  per  cent, 
out  of  the  total  circulation  of  40,000,000 — that  is,  that 
silver  had  driven  out  gold,  because  they  were  not  at  a 
parity. 

^^  Again,  the  same  document  says  that  since  the  law 
of  1803  France  has  had  no  gold  monetary  circulation 
during  the  period  before  1850.  Up  to  that  time  silver 
was  our  sole  monetary  circulation,  but  after  the  gold 
discoveries  of  California  and  Australia  gold  took  the 
place  of  silver  in  the  general  monetary  circulation  of 
the  country.  You  will  find  that  in  volume  2  page  82, 
of  the  same  oiBcial  document. 

"Again,  ypu  will  find  in  a  report  issued  by  the  min- 
ister of  finance  in  1869  that  France  had  had  one-third  of 
its  circulation  in  gold.     In  1843  almost  all  this  gold  bad 


52  SILVBB  AND  GOLD. 

disappeared.  Out  of  53,000,000  francs  then  possessed 
by  the  bank  only  1,000,000  francs  was  gold.  This 
metal  had  disappeared  from  1803  to  1848  because  it  had 
enjoyed  a  premium  which  reached  at  that  time  1|  per 
cent. 

^^  And  so  I  have  twenty  references  of  the  same  kind 
to  show  that  not  in  France  was  there  a  concurrent  cir- 
culation of  gold  and  silver,  for  the  reason  that  the  two 

4 

were  not  kept  at  parity  ;  that  every  student  of  our  own 
monetary  system  knows  perfectly  well  was  true  of 
the  United  States.  We  had  silver  only  in  circulation 
up  to  1834  and  shortly  after  1834,  when  the  ratio  was 

1  to  16.19.  So  gold  drove  out  silver,  and  we  had 
only  gold  in  circulation,  and  nobody  in  this  audience 
ever  saw  a  silver  dollar  in  circulation  after  about  the 
year  1840,  and  up  to  1873  no  silver  dollars  were  in  cir- 
culation, and  consequently  when  the  act  of  1873  was 
passed  there  was  not  any  silver,  and  had  not  been  since 
1840,  in  circulation,  and  at  the  time  the  act  of  1873 
was  passed  there  was  not  even  any  gold  or  silver  in  cir- 
culation. 

"  But  I  would  like  now  to  pass,  if  you  please,  to  the 
main  points.  I  would  like  to  discuss,  in  connection 
with  the  principal  topic  of  the  evening,  money  as  a 
measure  of  value,  or  as  redemption  money  is  like  a 
common  denominator,  to  which  other  things  are  re- 
ferred for  comparison. 

"  In  order  to  compare  goods  with  money,  there  is  no 
more  need  of  as  many  pieces  of  money  as  there  are  ar* 
tides  to  be  compared  than  there  is  of  having  a  quart 
cup  for  every  quart  of  milk  in  existence  or  having  a 
yard  stick  in  a  dry  goods,  store  for  every  yard  on  the 
shelf.     The  idea  that  to  multiply  the  measurements  of 


THE  HABVEY-LAUGHLIN   DEBATE.  58 

value  is  necessary  is  absurd,  but  it  is  of  the  foremost 
importance  that  the  measure  of  values  should  not  be' 
tan)pered  with,  and  should  not  be  changed  by  legislation 
to  the  damage  of  all  transactions  based  upon  it. 

"  Right  here  is  the  whole  secret  of  the  opposition  to 
silver  as  money.  Silver  has  lost  its  stability  of  value. 
It  is  no  better  than  any  ordinary  metal  for  stability. 
The  action  of  India  sends  it  down  20  per  cent.  The 
mere  rumor  of  the  Chinese  indemnity  sends  it  up  10  per 
cent. 

"  The  more  money  there  is  roaming  about  in  circula 
tion  is  no  reason  why  anyone  gets  more  of  it.  Money, 
like  property,  is  parted  with  for  a  consideration.  No 
matter  how  many  more  coins  there  are  coming  from  the 
mint  under  free  coinage  and  going  into  the  vaults  of 
the  banks  through  the  credit  of  the  mine  owners  who 
own  the  bullion,  there  are  no  more  coins  in  the  pockets 
of  Weary  Waggles,  who  is  cooling  his  heels  on  the 
sidewalk  outside  the  bank.  The  increased  number  of 
Iiandsome  hoi*ses  and  carriages  on  Michigan  avenue 
does  not  imply  that  I  can  get  them  if  I  have  not  the 
money  to  purchase  them  with.  I  must  produce  work, 
turn  out  goods  and  labor.  I  must  get  gold  or  silver  or 
something  to  the  value  of  the  goods,  and  in  that  way  I 
will  get  them,  and  in  no  other  way. 

"  There  is  no  way  of  getting  rich  by  short  cuts,  or  by 
legislation,  or  by  merely  increasing  the  means  of  ex- 
changing goods,  when  goods  themselves  are  the  princi- 
pal thing. 

"  Money  is  only  the  machine  by  which  goods  are  ex- 
changed against  one  another.  No  matter  how  valu- 
able, it  is  not  wanted  for  itself.  It  is  only  a  means  to 
an  end,  like  a  bridge  over  a  river.    Do  you  suppose  that 


64  SILV2R  AND  GOLD. 

the  farmers  of  this  country  really  believe  that  wiA 
each  ton  of  silver  taken  out  of  the  mines  by  tlie  silver 
lawmakers  in  the  senate  that  there  are  created  bushels 
of  wheat  and  bushels  of  corn  and  barrels  of  mess  pork. 
The  silver  belongs  to  the  mine  owners.  How  will  it 
get  into  our  pockets  or  the  pockets  of  anyone  else  ?  Do 
we  insult  anyone's  penetration  by  supposing  that  the 
congressional  kings  are  going  coaching  about  the 
country  distributing  their  money  for  nothing, 

"Our  farmers  are  no  fools.  They  know  they  can 
get  more  money  by  producing  more  commodities  to  be 
exchanged  for  it,  and  for  those  commodities  they  want 
as  good  money  as  any  other  men  in  the  country  have 
got. 

"  I  want  to  call  your  attention  to  the  fact  that  goods 
in  these  days  after  being  expressed  in  the  common  de- 
nominators of  value  are  exciianged  practically  without 
the  use  of  money.  I  will  explain  that  very  briefly,  be- 
cause the  facts  must  be  familiar  to  ever}'  business  man 
in  the  City  of  Chicago.  A  sells  a  car  load  of  wheat  and 
draws  a  bill  on  the  Cliicago  purchaser  for  the  same.  A 
discounts  this  bill  and  has  a  credit  in  his  deposit  ac- 
count in  a  bank  representing  his  wheat  expressed  in 
terms  of  money.  But  another  person,  B,  may  have 
sold  to  A  woolen  goods  for  the  same  amount.  B  draws 
on  A  for  the  sum  and  B  also  gets  a  credit  to  his  bank 
account  through  the  banks ;  then  these  two  bits  of 
paper  meet  and  offset  each  other — that  is  the  wheat  and 
woolen  goods  expressed  in  the  common  denominator  of 
value  are  exchanged  against  each  other  by  a  medium  of 
exchange  known  as  deposit  currency. 

"  If  you  will  permit  me  I  will  point  to  that  chart  on 
the  other  side  of  the  room  which  represents  tha  relative 


BENBY  M.  TELUili. 


V  C,  .  .  •■■■ 


THE  HAEVEY-LAUGHLIN  DEBATE.  57 

amount  of  that  kind  of  currency  in  the  United  States 
as  compared  to  the  other  kind.  I  refer  Id  that  large 
gray  square  at  the  right,  which  represents  the  total 
amount  of  credit  deposits  in  the  banks.  Now,  what 
does  it  do  ?  Why,  it  does  the  work  which  we  know 
exactly  in  quantitive  form  is  performed  by  the  clear- 
ings of  the  United  States.  That  function,  or  that  kind 
of  money,  the  most  welcome  of  all  our  kinds  of  money, 
amounts  at  the  present  time  to  $2,963,000,000  in  our 
deposit  accounts. 

**  But  what  work  does  it  do  ?  "  I(  Joes  the  work  of 
our  clearing  houses.  You  can  verify  those  figures  any 
week  if  you  wish  td  know  the  way  in  which  transac- 
tions are  actually  performed,  goods  actually  exchanged 
without  the  use  of  money  to  the  amount  of  $60,000,« 
000,000  a  year.  And  when  you  contrast  the  size  of 
that  with  the  square  representing  our  gold,  our  silver 
certificates,  our  national  bank  notes  and  our  greenbacks 
and  subsidiary  currency,  which  are  the  other  blocks 
on  the  same  sheet,  you  can  see  what  an  immense  influ- 
ence that  has  on  our  business. 

^*  It  is  not  necessary  for  me  to  expand  further  on 
that  point  because  those  are  commercial  facts  apparent 
to  any  business  man  in  the  union.  I  can  only  say  that 
from  92  to  95  per  cent,  of  all  our  transactions  are  per- 
formed in  this  way,  practically  without  the  use  of 
money,  and  that  under  recent  investigations  by  the 
comptroller  of  the  currency  about  54  per  cent,  are  per- 
formed in  the  same  way.  But  it  will  be  said  by  some 
one:  "This  vast  system  of  credit" — but  it  is  not 
credit,  it  is  a  system  of  exchange — but  they  would  say: 
**This  vast  system  of  credit  must  be  liquidated  iu 
actual  coin  or  money."    And  so  our  business  s^sten;! 

4 


58  SILV£B  AND  GOLD. 

rests  like  an  inverted  pyramid  upon  the  apex  of  the 
small  reserve  of  coin.     Now,  how  true  is  that  ? 

**  If  I  have  explored  rightly,  and  I  took  but  a  very 
short  time  to  refer  to  that  matter,  it  would  seem  to  me 
that  is  just  the  means  by  which  goods  expressed  in  the 
term  of  the  common  measure  of  value  are  exchanged 
against  each  other  without  the  intervention  of  money, 
and  by  this  means,  which  is  independent  of  the  passing 
of  coin  from  hand  to  hand.  These  transactions  ex- 
pressed in  terms  of  money  are  not  based  upon  coin,  but 
upon  goods  that  are  bought  and  sold. 

"No  business  man  waits  until  checks  and  money 
have  reached  such  a  volume  before  he  thinks  that  the 
medium  is  suflBciently  large  for  the  needs  of  trade,  be- 
fore he  sells  his  car  load  of  wheat  or  his  bushel  of  corn 
or  woolen  goods.  He  first  sells  his  grain  and  cotton 
and  draws  a  check  or  bill  afterward.  The  deposit  cur- 
rency I  have  spoken  of  is  the  consequence  and  result 
of  the  transactions.  This  system  I  have  been  describ- 
ing is  as  broad  as  the  transactions.  It  is  ultimately  re- 
solved into  goods  and  based  on  goods. 

"  It  is  not  true,  therefore,  that  this  system  I  have 
been  describing  is  unstable  like  an  inverted  pyramid. 
The  transactions  are  the  reason  for  the  existence  of  the 
checks  and  deposits.  The  checks  and  the  deposits  are 
not  the  reason  for  the  existence  of  the  transactions. 
To  talk  then  about  redemption  money  being  scarce  or 
being  cut  off  by  the  act  of  1873  is  about  as  futUe  as 
talking  about  hearses  being  scarce  because  there  is  not 
a  hearse  to  every  man.  If  people  die  rapidly  the 
hearses  do  not  stand  so  long  in  the  undertaker's  yard. 
If  many  transactions  take  place  the  money  becomes 
nimble  and  a  little  goes  a  long  way.    One  hearse  may 


THE  HABVEY-LAUGHLIN  DEBATE.  69 

bury  many  people,  one  at  a  time,  and  so  a  little  money 
will  exchange  a  great  many  goods,  but  you  say,  there 
must  be  money  enough  to  liquidate  every  transaction 
necessary,  and  you  point  to  a  panic,  and  when  there  is 
a  money  famii^e.  You  point  to  when  there  is  a  money 
panic,  that  is  i^^  say,  when  properties  and  securities  are 
thrown  on  tb^  market  at  once  to  be  sold  to  get  the 
legal  means  oT  paying  obligations. 

'*  Very  truo«  but  in  ordinary  times  all  goods  are  not 
at  once  offered  any  more  than  all  people  are  dying  at 
once.  Wheii  a  cholera  epidemic  comes  people  die,  and 
dio  rapidly,  nnd  hearses  are  in  exceptional  demand,  like 
money  in  a  panic.  But  note  this :  Even  if  every 
corpse  is  no^  lucky  enough  to  be  carried  in  a  hearse  it 
yet  can  be  buried  some  way  or  other.  It  may  not  be 
so  stylishf  kut  it  gets  there  all  the  same.  It  may  go  to 
its  grave  in  a  cart  or  an  express  wagon.  So  the  goods 
aiid  mouay,  if  they  cannot  all  be  exchanged  in  cur- 
rency for  coin,  they  may  yet  be  exchanged  by  other 
means,  by  clearing-house  certificates,  or,  last  of  all, 
even  bj  barter.  All  goods  are  not  offered  for  exchange 
at  once  any  more  than  a  million  men  crossing  a  bridge 
are  all  on  the  bridge  at  the  same  time.  A  million  men 
can  all  cross  a  bridge  comfortably  100  at  a  time,  but  if 
they  all  cross  at  once  there  is  a  panic  and  some  one  is 
hurt. 

*'  Now,  I  want  to  suggest  in  connection  with  the  act 
of  1878  and  with  the  general  question  very  briefly  one 
or  two  facts.  Prices  since  1873  have  not  fallen  be- 
cause of  any  lack  of  money,  and  I  think  I  have  shown 
you  on  general  principles  there  has  been  no  reason  why 
there  should  be  an  increasing  amount  of  money,  and  1 
iutend  to  show  you  now  by  facts  that  prices  have  not 


60  SILVER  AND  GOLD. 

fallen  since  1873  because  of  any  lack  in  the  quantity 
of  money. 

"  I  have  prepared  on  that  chart  the  facts  showing 
the  most  extensive  movement  of  prices,  the  most  ex- 
haustive study  of  prices  ever  made  in  this  country  or 

« 

any  other.  If  the  gentlemen  can  see  across  the  room 
you  will  find  that  there  is  a  straight  black  line  crossing 
the  middle  chart  and  that  that  represents  the  figure 
100,  or  the  basis  from  which  the  figures  move.  Now, 
there  is  a  line  that  starts  from  the  beginning  there  in 
1860  representing  the  movements  of  223  articles 
quoted  solely  in  the  American  market.  That  line  rises 
up  as  you  see  it.  It  is  marked  '  C*  It  rises  up  from 
that  base  line  to  1865  and  then  it  starts  downward. 
It  moves  down  and  in  1879  strikes  the  base  line  again, 
so  that  the  movement  of  prices  shows  that  in  1879  we 
were  exactly  on  the  same  level  to  prices  before  the 
civil  war.  Then  the  line  moves  slightly  above  the  base 
line,  showing  that  prices  were  higher  than  1860.  Then 
it  drops  a  little  under  again  to  the  figure  'C,'  just  un- 
der the  line,  and,  compared  with  1860,  the  prices  of 
223  articles  averaged  together  in  the  American  mar- 
kets showed  a  decrease  as  compared  with  1860. 

"  Now,  let  us  compare  with  that  the  circulation. 
There  is  a  line  marked  *  D  *  across  it.  Soon  after  the 
civil  war  it  moved  a  little  above  the  line,  and  then  in 
1879  the  circulation  of  the  United  States  advanced 
rapidly  and  moves  to  the  right.  There  was  a  greater 
demand  put  upon  the  money  with  the  increasing  circu- 
lation, but  I  point  to  the  chart  to  show  you  what  the 
transactions  were  which  you  would  appeal  to  as  show- 
mg  how  much  trade  had  increased.  That  might  indi- 
cate the  amount  of  demand  put  upon  the  circulation 


THE  HABVET-LAUGHUK  DEBATE.  61 

of  the  country.  That  line  np  there  in  red  is  the  line 
of  the  coloring  which  I  just  explained  to  you  was  the 
amount  of  transactions  in  the  United  States  practicalljr 
without  the  use  of  money,  consequently  the  very  thing 
that  you  will  refer  to  as  indicating  an  increased  de- 
mand upon  money  is  the  very  thing  which  explains 
just  to  what  extent  we  have  economized  the  use  ol 
money. 

**  Lastly  on  that  chart  there  is  a  dotted  line  and  red, 
which  begins  some  distance  from  the  base  line.  That 
represents  the  value  of  silver  compared  with  gold.  It 
travels  along  the  '70s  about  the  same  ratio,  15^  to  1. 
Then  it  goes  down  and  up.  In  1879  it  was  just  cross* 
ing  the  line  of  circulation  at  '  D.'  It  keeps  on  pretty 
steadily  until  after  1885,  and  then  it  drops  below  the 
line,  then  rises,  and  now  it  is  again  down ;  you  can 
just  see  it  faintly  at  the  lower  edge  of  the  chart,  like  a 
star  in  the  winter  just  passing  over  the  horizon.  That 
is  a  significant  story.  That  shows  the  relation  of  silver 
to  gold,  while  the  line  ^  C '  indicates  the  relation  of  all 
the  commodities  in  the  United  States  to  gold. 

"  Now  I  ask  you  whether  there  is  any  parallel  show 
ing  of  silver  relative  to  gold  and  commodities  relative 
to  gold  ?  The  price  of  commodities  is  8  per  cent,  be* 
low  what  it  was  in  1860.  Silver  is  60  per  cent,  below. 
Isn't  it  perfectly  clear  then,  gentlemen,  that  silver  did 
not  have  the  same  purchasing  power  in  1894  as  it  had 
in  1878  ? 

"  There  is  absolutely  no  correspondence.  The  pur- 
chasing price  of  silver  is  infinitely  below  the  price  of 
the  purchasing  power  which  it  had  in  1878.  Therefore, 
it  is  not  to  day,  in  1894,  a  just  means  of  paying  debts. 
But  more  than  that,  why  should  there  have  been  any 


62  8ILVEB  AND  GOLD. 

change  in  prices  in  the  United  States  after  1873? 
There  was  no  more  gold  in  circulation  than  in  1873, 
yet,  May  1,  1895,  there  was  gold  in  circulation  in  the 
United  States  $568,000,000,  and  silver  $524,000,000, 
making  a  total  of  $1,092,000,000.  More  redemption 
money  has  been  coined  by  the  mint  by  $1,092,000,000 
and  yet  prices  fall.  That  is  due,  without  the  shadow 
of  a  doubt  to  any  investigator,  to. the  cheapened  cost 
of  production. 

"  Moreover,  if  it  be  associated  with  a  fall  of  prices 
since  1873,  with  the  demonetization  of  silver,  I  point 
to  the  fact  that  there  is  more  silver  in  circulation  in 
the  very  countries  concerned  to-day  than  in  1878. 
Germany  has  still  110,000,000  thalers  of  her  old  silver 
and  the  five  franc  pieces  of  France  are  more  in  circu- 
lation than  in  1873,  and  they  are  all  legal  tender. 

"  The  United  States,  after  the  Latin  union  ceased  to 
coin  silver  in  1878,  tried  this  experiment,  and  now  the 
United  States  has  added  to  the  circulation  of  the  world 
something  over  $600,000,000.  That  is,  there  is  more  to- 
day, in  1896,  than  there  was  in  1873.  Therefore,  why 
the  use  of  talking  about  the  fall  of  prices  having  been 
due  to  the  subtraction  of  the  money  of  the  woild 
when  there  is  more  silver  in  circulation  and  more  gold 
in  circulation  by  hundreds  of  millions. 

"  Moreover,  it  may  be  said  that  commodities  had 
fallen  because  of  the  subtraction  of  silver  from  the  cir- 
culation. In  1873,  compared  with  earlier  years,  the  ex- 
ertion of  the  average  laborer  had  risen  8  per  cent.  The 
laborer  to-day  commands  more  gold  than  he  ever  coaa- 
manded  in  the  industrial  history  of  the  world.  Not 
only  have  wages  risen  all  this  time,  but  because  of  this 
great  cheapening  in  the  cost  of  production  of  commod- 


THE  HABVEY-LAUGHLIK  DEBATE.  63 

ities,  which  has  caased  the  falling  of  the  prices  of 
commodities  in  general,  wages  have  risen  in  money,  in 
gold,  and  his  purchasing  power  has  increased  double. 
Not  only  has  money  risen  but  commodities  have  fallen. 
The  laborer  has  got  double  since  1873.  For  heaven's 
sake  let  us  have  more  of  1873  for  the  laborer. 

^'  This  persistence  in  saying  that  the  fall  of  prices  is 
due  to  silver  is  like  the  story  of  the  grandmother,  who 
said  there  was  something  good  in  everything,  and  the 
daughter  said :  '  I  really  believe  you  would  say  some- 
thing good  about  the  prince  of  evil.'  *  Well,  my  dear, 
I  am  sure  we  must  all  admit  he  has  great  persever- 
ance.' 

"  Now  the  free  coinage  of  silver  at  16  to  1 — ^let  us 
get  the  record  to  the  point ;  when  the  market  ratio  was 
about  32  to  34 — ^it  skipped  about  so  much  you  can't  be 
really  certain.  It  has  been  34  to  1 ;  somewhere  between 
32  and  34  now.  If  the  market  ratio  be  that  in  the  mint 
ratio  you  propose  16  to  1  there  is  a  premium  of  sixteen 
ounces  of  silver  profit  on  withdrawing  every  ounce  of 
gold  in  circulation.  Free  coinage  of  silver  at  16  to  1 
means  single  silver  monometallism  i  16  to  1  is  a  single 
silver  standard,  and,  in  the  language  of  my  opponent, 
we  will  start  with  all  the  South  American  countries 
and  Mexico.  Free  coinage  of  silver,  then,  is  absolutely 
certain  to  drive  all  gold  out  of  circulation.  The  mere 
hint  of  it  did  that  in  the  panic  of  1893.  May  1, 1895, 
the  first  of  this  month,  there  were  $568,000,000  of  gold 
in  circulation.  Since  gold  must  be  inevitably  driven 
out  if  free  coinage  of  silver  is  had,  there  will  be  no  in- 
erease  in  the  quantity  of  money. 

"  If  the  people  who  support  free  coinage  hope  to  in- 
Qrease  the  quantity  of  money  it  is  perfectly  evident  oj; 


64  8ILVEB  AND  GOLD. 

the  face  of  it  that  it  will  contract  the  currency  by  the 
total  amount  of  $568,000,000.  It  could  not  change 
prices,  therefore,  by  increasing  the  amount  of  the  me- 
dium of  the  exchange.  That  is  plain.  •  The  only  way 
it  would  act  would  be  to  increase  the  price  of  every* 
thing  because  reckoned  in  a  cheaper  medium  than  that 
of  gold.     This  my  friend  admitted  this  evening. 

"  If  prices  would  rise  we  would  have  a  glow  of  satis- 
faction. It  is  the  kind  of  glow  of  satisfaction  which 
comes  to  the  inebriate  after  he  has  been  supplied  with 
drink  after  he  has  been  thirsty  a  long  while.  For  ex« 
ample,  take  a  pair  of  gloves  worth  100  cents  in  gold. 
It  would  exchange  for  about  210  cents  in  silver.  A 
dozen  of  eggs  now  selling  at  15  cents  would  sell  for 
about  80  cents,  and  everything  we  buy  would  rise  in 
proportion,  since  the  intrinsic  value  of  the  pure  dollar 
is  worth  but  51  cents. 

"  As  free  coinage  of  silver  would  inevitably  result  in 
a  rise  of  prices  it  would  immediately  result  in  the  fall 
of  wages.  Its  first  effect  would  be  to  diminish  the  pur- 
chase power  of  all  our  wages.  The  man  who  gets  $500 
or  $1,000  a  year  as  a  fixed  rate  of  wages  or  salary  will 
find  he  can  buy  just  half  as  much  as  now.  Yes,  but 
some  one  said  the  employer  will  raise  his  wages.  Now, 
will  he  ?  The  facts  on  that  are  clear  and  indisputable. 
It  has  been  one  of  the  undisputed  facts  of  history 
that  when  prices  rise  the  wages  of  labor  are  the  last  to 
advance,  and  when  prices  fall  the  wages  of  labor  are  the 
first  to  decline.  Free  coinage  of  silver  would  make  all 
the  articles  of  the  laborer's  consumption  cost  him  100 
per  cent,  more  unless  he  can  get  a  rise  in  his  wages  by 
dint  of  strike  and  quarrels  and  all  the  consequent  dis- 
Mtisfaction  arising  from  friction  between  the  employer 


THE  HAEVEY-LAUGHLlN  DEBATE.  65 

and  employee.    He  would  be  able  to  buy  only  half  as 
many  articles  of  consumption  as  he  had  before. 

^*In  short,  a  rise  of  prices  necessarily  results  in  a 
diminution  of  the  enjoyments  of  the  laboring  class  un- 
til they  can  force  the  employers  through  a  long  process 
of  agitation  -to  make  an  increase  in  their  wages.  Are 
we  willing  to  sacrifice  the  interests  of  the  laboring 
class  to  the  demands  of  certain  owners  of  silver  mines 
who  hoodwink  people  with  the  cry  of  more  money  ? 

^*  This  is  a  very  distinct  and  serious  damage.  The 
damage  runs  in  other  directions,  however.  But  the 
proposition  to  adopt  a  depreciated  standard  of  value  is 
simply  an  attempt  to  transfer  from  the  great  mass  of 
the  community,  who  have  been  provident,  industrious 
and  successful,  a  portion  of  their  savings  and  gains  into 
the  pockets  of  those  who  have  been  idle,  extravagant 
or  unfortunate.  The  provision  which  has  been  made 
for  old  age,  for  sickness,  for  death,  for  widows  and  or- 
phans or  by  insurance  will  be  depreciated  in  the  same 
ratio. 

"  No  invasion  of  hostile  armies  burning  and  destroy- 
ing as  they  advance  could  by  any  possibility  equal  the 
desolation  and  ruin  which  would  thus  be  forced  upon 
the  great  mass  of  the  American  people.  Such  a  deso- 
lation, moreover,  does  not  fall  alike  upon  the  shrewd 
and  unsophisticated.  The  shrewd  ones,  the  bankers 
and  the  like,  will  be  easily  able  to  take  care  of  them- 
selves, while  we  plain  people  will  be  ■  robbed  of  our 
hard  earnings  without  any  hope  of  compensation. 

"  Moreover,  free  coinage  of  silver  would  injure  those 
who  wish  to  borrow.  I  should  like  to -touch  upon  the 
question  of  debtor  and  indebtedness.  The  justice  of 
to-day  permitting  mortgages  and  obligations  to  be  paid 


66  SILYBB  AND  GOLD. 

off  in  money  50  per  cent.  less  than  that  in  which  they 
were  contracted  shows  its  own  dishonesty  on  its  face 
without  further  remark.  When  you  think  that  since 
1873  there  has  been  only  this  standard,  their  offer  to 
pay  them  in  a  money  worth  half  of  the  present  value 
is  simply  repudiation  and  dishonesty. 

'^  Let  me  explain  that.  If  I  have  attempted  to  save 
painfully  $1,000  by  many  years  of  sacrifice,  and  loan  it 
to  B  on  a  mortgage,  then  if  B  urges  legislation  by 
Which  he  can  pay  me  back  in  a  cheaper  money,  worth 
one-half  of  what  he  got  from  me,  do  you  suppose  I 
would  ever  lend  to  B  again  or  renew  my  mortgage?  If 
I  had  pinched  and  saved,  gone  without  a  new  overcoat 
or  used  a  shabby  parlor  carpet  in  order  to  save  some* 
thing  and  invest  it  for  my  child,  and  if  then  I  gave  it 
over  to  B,  who  has  the  spending  of  it,  is  it  not  fair  and 
square  that  I  should  have  back  again  what  I  gave  him  ? 
If  B  spent  it  and  enjoyed  it  he  is  not  thereby  absolved 
from  paying  it  back. 

"I  appeal  to  the  sense  of  fair-mindness  in  every 
American  in  this  land.  No  trick  or  sophistry  can  make 
the  scaling  of  this  debt  to  me  anything  but  dishon- 
esty and  cheating.  Any  state  that  enacts  laws  whereby 
debts  can  be  scaled  signs  its  own  commercial  doom. 
Cheating  is  a  bad  business  policy  for  man  and  state.  I 
say  that  the  passage  of  the  bill,  free  coinage  of  silver 
at  16  to  1,  would  injure  the  borrower. 

"  The  savings  banks  of  the  United  States  in  the 
years  1893  and  1894  had  deposits  from  4,777,000  de- 
positors, with  a  total  amount  deposited  of  $1,748,- 
000,000,  or  an  average  to  each  depositor  of  $865.86. 
Pass  a  free  coinage  measure,  16  to  1,  and  you  hurt 
the  purchasing  power  of  the  deposits  of  the  small 


•    / 
THB  HAByBT-LAUGHLIN  DEBATSV-  ^ .  67 

savings  in  this  country,  affecting  nearly  5,000,000  of 
people. 
.  '^  The  building  and  loan  associations  in  this  country 
are  indebted  to  their  members  to  the  amount  of  $450,- 
000,000.  Pass  a  free  coinage  measure  and  you  scale 
that  indebtedness  one-half,  and  whom  do  you  touch  ? 
The  life  insurance  outstanding  Dec.  31, 1889,  was  $618,- 
000,000.  Scale  that  indebtedness  one -half  and  leave  a 
desolate  widow  or  the  children  with  one-half,  and  in 
recent  years,  too,  under  the  present  standard. 

**  Take  the  pensions  to  nearly  the  amount  of  $140,* 
000,000  that  are  paid  annually.  Pass  a  free  coinage 
measure  and  reduce  those.  You  would  thus  affect  11,- 
000,000  of  persons.  The  case  that  I  have  described, 
therefore,  is  not  a  limited  or  special  one. 

"  The  bonded  debt  of  the  railways  in  the  United 
States  is  about  $6,000,000,000.  If  free  coinage  of  sil- 
ver were  introduced  it  would  enable  these  railways  to 
pay  off  their  debts  with  what  is  now  equivalent  to 
about  $3,000,000,000.  They  would  thus  be  relieved  of 
the  necessity  of  paying  the  small  investors  who  have 
taken  their  bonds  one-half  of  what  these  corporations 
now  owe  them,  and  it  is  only  a  few  of  such  corpora- 
tions and  railways  that  have  outstanding  indebtedness 
that  has  run  a  long  time,  and  which  could  have  been 
paid  before  the  period  of  1873. 

"  The  Slierman  act  of  July  4,  1890,  unless  it  had 
been  repealed,  would  have  brought  us  to  the  silver 
standard  as  it  was.  The  mere  suspicion  of  it  struck  a 
blow  at  our  measure  of  value,  brought  on  a  panic,  made 
prices  uncertain  and  caused  doubts  as  to  future  plans 
in  every  factory  and  shop  in  the  land.  Those  who 
have  silver  mines,  and  who  can,  by  their  wealth,  coo* 


08  8ILVBB   AKD  GOLD. 

trol  political  parties  aud  legislatures,  wlio  make  the 
very  seat  of  our  national  government  their  prided  of- 
fices and  actually  turn  the  national  senate  into  a  bureau 
for  bullying  the  prices  of  their  product,  to  those  men 
we  say  beware. 

"  Those  of  us  who  belong  to  the  rank  of  plain  citi- 
zens, who  are  thinking  only  of  the  countrj'^  as  a  whole, 
who  believe  in  honesty  and  intelligence,  hold  that 
when  a  question  of  right  or  wrong  is  presented  in  a 
campaign  of  education  the  people  will  decide  for 
right  and  for  justice.  We  cannot  believe  that  a 
special  interest  led  by  millionaires  can  go  on  unchecked 
in  their  plan  of  sacrificing  the  taxpayers  in  order  to 
heap  up  riches,  especially  when  this  is  done  on  the  most 
fallacious  of  economic  grounds — grounds  which  have 
been  proved  wrong  by  the  experience  of  every  country 
of  modern  times.  How  long  will  it  take  to  convince 
every  man  in  the  land  that  conditions  of  prosperity  are 
those  in  which  the  honest  men  can  best  meet  and  pay 
his  obligations. 

**  Unless  the  debtor  can  get  employment  or  find  a 
market  for  his  goods,  how  can  he  pay  interest  or  prin- 
cipal ?  Now,  if  tampering  with  the  standard  in  terms 
of  which  all  transactions  are  drawn,  all  contracts  made, 
all  goods  bought  and  sold,  brings  industrial  paralysis, 
because  no  one  knows  what  will  happen  ten  days  hence, 
and  no  one  will  go  on  making  goods  for  a  changing 
market,  it  is  to  the  interest  of  every  laborer,  every 
debtor,  every  honest  man,  is  it  not,  to  keep  and  main- 
tain the  value  of  the  standard  so  far  as  that  may  be 
done? 

"  The  debtor  will  be  no  better  off  by  free  coinage 
even  if  we  had  it,  which  we  never  will.     Every  lender 


THE  HABVET-LAUGHLIN  DEBATE.  69 

would  insert  the  gold  clause  in  the  contract  on  our 
present  basis  of  contracts  and  prices.  The  very  hint  of 
possibility  of  a  change  to  a  depreciated  single  standard 
would  precipitate  a  panic  just  as  it  did  in  1893,  and 
when  the  gentleman  who  spoke  before  me  charged  me 
with  being  certain  to  engage  in  special  pleadings  I  ask 
him  to  consider  the  condition  of  the  country  to-day, 
what  it  is  to-day  with  the  great  iron  industries  of  Penn- 
sylvania keeping  up  prices  since  there  has  been  a  steady 
recovery  of  industry  from  the  very  moment  when  Mr. 
Cleveland  put  his  foot  down  and  said,  '  We  should  and 
shall  maintain  our  standard  of  value  inviolate.'      j 

^*Is  it  true,  that,  even  laying  aside  all  honor  and 
justice,  resorting  to  a  single  silver  standard  depreciated 
48  per  cent.,  the  debtor  will  sell  his  goods  at  100  per 
cent,  more,  and  the  more  easily  pay  off  his  debts  ?  By 
no  means.  That  is  the  most  superficial  of  all  ideas. 
Trickery  is  always  sure  to  injure  those  who  resort  to  it. 
And  I  do  not  myself  feel  it  necessary  to  do  any  more 
than  appeal  to  the  selfish  motives  of  the  American  peo- 
pie.  I  for  one  am  ready  to  appeal  to  that  integrity, 
that  sense  of  honor,  and  that  uprightness  in  the  American 
people,  which,  whenever  it  has  been  appealed  to,  has  de- 
cided rightly  upon  these  great  questions  of  justice. 

*^In  conclusion,  gentlemen,  extraordinary  as  is  the 
proposal  for  free  coinage,  it  is  in  truth  only  a  huge  de- 
ceit. It  was  born  in  the  private  offices  of  the  silver 
kings,  nursed  at  the  hands  of  the  speculators,  clothed 
in  economic  error,  fed  on  boodle,  exercised  in  the  lobby 
of  congress,  and  as  sure  as  there  is  honesty  and  truth  in 
the  American  heart  it  will  die  young  and  be  buried  in 
the  same  ignominious  grave  wherein  lies  the  now  for- 
gotten infant  once  famous  as  the  rag  baby. 


70  SILVEB  AND  GOLD. 

*'  Free  coinage  is  greenbackism  galvanized  into  life. 
That  heresy  in  its  old  form  of  a  demand  for  more  money 
has  already  been  laid  low.  It  will  not  long  deceive  us 
in  its  new  form  of  a  demand  for  more  silver,  for  silver 
fiatism,  nor  in  any  other  respect  in  what  it  presumes  to 
be.  It  is  not  a  predecessor  for  bimetallism.  It  is  a 
wild  leap  in  the  dark  for  silver  monometallism.  Under 
the  cry  for  more  money  are  veiled  the  plans  of  a  giant 
syndicate  of  mine  owners  and  speculators,  who  have 
hoodwinked  the  people  in  certain  parts  of  the  country 
and  who  are  still  deluding  them  with  a  specious 
argument  for  more  money,  and  are  laughing  in  their 
sleeves  at  a  constituency  so  easily  gulled.* 


REJOINDERS  OF  CONTESTANTS. 

The  applause  following  Professor  Laughlin^s  ad- 
dress having  subsided  the  chairman  announced  that 
Mr.  Harvey  would  be  given  fifteen  minutes  for  rejoin- 
der to  bis  opponent.  Promising  to  cover  in  that  tmie 
all  the  ground  Professor  Laughlin  had  gone  over  Mr. 
Harvey  said : 

"He  says  that  exports  in  1872  were  $1,100,000,000, 
and  in  1894  $1,500,000,000  as  an  argument  that  be- 
fore gold  and  silver  came  back  we  were  running  on 
paper  money.  I  would  only  say  that  the  population 
has  increased  faster  than  the  increase  as  shown  by 
those  figures.  He  says  both  the  gold  and  silver  ex- 
ports and  imports  during  the  years  from  1860  to  1870 
were  paid  for  in  gold  and  silver,  as  an  evidence  that 
gold  and  silver  were  international  money.  Now,  we 
did  not  have  gold  and  silver  as  money  then,  and  yet  it 


THB  HABYET-LAUGHUN  DBBATE.  71 

was  ased  in  the  settlement  of  balances.  But  as  what? 
Not  as  money,  but  as  merchandise,  and  it  is  so  used  to- 
day— not  as  coined  money,  but  as  merchandise.  We 
had  paper  for  money  and  they  had  gold  and  silver,  and 
yet  it  was  used  as  merchandise  then  as  it  is  used  now. 
And  if  all  the  gold  went  out  of  circulation  with  us  and 
we  had  silver  or  paper  temporarily  we  could  buy  the 
world's  merchandise  now  as  we  did  then  and  as  we  did 
all  the  time. 

*^  He  says  that  the  clause  *in  the  Bland-Allison  act 
that  stipulates  that  silver  is  legal  tender  money  except 
where  otherwise  provided  in  the  contract  is  just  and 
proper.  Now,  gentlemen,  that  clause  meant  this,  ex- 
cept where  otherwise  provided  in  the  contract  we  will 
provide  for  gold.  Now,  you  silver  men  shoot  your 
guns.  You  silver  men  can  pass  any  law  you  want, 
we  have  got  you  sewed  up  in  a  contract  which  called 
directly  for  gold.  Never  before  in  the  history  of  the 
world,  nowhere  in  the  records  of  the  United  States, 
can  you  find  where  we  enacted  any  law  authorizing  a 
creditor  to  take  a  note  discriminating  between  our 
legal  tender  money. 

'*  It  is  statutory  treason  to  disrupt  and  discredit  our 
money,  and  a  statute  which  permits  it — which  was  the 
Bland- Allison  act — is  the  first  of  the  kind  in  the  stat- 
utes of  the  United  States,  and  it  did  just  what  it  was 
intended  to  do — fasten  a  gold  standard,  by  putting  it  in 
the  contract.  Such  a  thing  was  never  done  before, 
and  is  unjust,  if  monometallism  is  unjust. 

"  He  says  silver  drove  out  gold  in  France.  Silver 
also  drove  out  gold  in  this  country,  he  says,  for  the  first 
fifty  years  of  the  century,  and  then  gold  drove  out  silver. 
Now  that  is  just  what  we  want  the  business  men  of 


72  SILVER  AND  GOLD. 

Chicago  to  understand.  That  is  bimetallism  ;  bimetal- 
lism, which  makes  either  gold  or  silver  primary  money, 
because  when  one  metal  gives  out  and  gets  dearer  or  be- 
comes scarce  the  other  comes  in.  How  can  silver  come 
in  now.  There  is  no  such  law  authorizing  it  to  be 
primary  money  or  redemption  money.  It  cannot  come 
in  now.  Gold  has  got  the  crack  to  itself,  but  under 
bimetallism  for  centuries,  as  long  as  we  have  statistical 
record  of  it,  when  one  metal  came  in  and  drove  the  other 
out,  it  was  because  it  was  cheaper  by  a  small  percent- 
age, which  drove  it  partially  out  or  for  a  short  time.  Or 
it  drove  it  substantially  all  out,  and  tlien  came  the 
other,  but  it  was  the  very  fact  that  either  metal  an- 
swered for  use  as  money  and  that  if  one  was  not 
enough  or  if  the  business  of  the  country  would  have 
its  back  broken  by  reason  of  insisting  on  one  metal — 
there  was  the  other  to  take  its  place,  and  that  is  what 
bimetallism  means. 

*'Now,  it  does  not  mean  when  one  of  the  metals  goes 
out  of  circulation  temporarily  that  is  not  a  measure  of 
value,  because  it  is  a  measure  of  value.  This  question 
is  world-wide  in  the  sense  of  commercial  parity.  If 
silver  left  us  in  1873,  because  it  was  at  2  per  cent, 
premium  over  gold,  at  16  to  1,  why  was  it  ?  Because 
there  was  a  market  in  Europe ;  the  mines  in  France 
were  open  to  it  at  the  ratio  of  15j^  to  1,  and  it  went 
there,  and  took  the  place  of  so  much  gold,  which  came 
back  to  us,  but  it  is  not  so  now.  Silver,  when  it  leaves 
us,  does  not  take  the  place  of  money,  because  silver  i? 
demonetized.  With  both  the  metals  remonetized,  one 
of  the  metals  going  out  of  use,  and  leaving  us,  we 
have  still  a  measure  of  value,  because  it  is  holding  up 
the  measures  of  values  for  the  world.    It  is  holding  up 


JOSEPH  N.    DOLPH, 


THE  HABVEY-LAUGHLIN  DEBATE.  75 

the  value  of  wheat  in  LoDdon,  where  it  makes  them 
pay  f  1.30  for  Indian  wheat,  and  makes  them  pay  us 
$1.30  for  our  wheat.  Gold  and  silver  alternately  are 
the  strength  of  bimetallism,  and  it  is  not  this  one  or 
the  other  one  used  as  a  measure  of  value  when  both 
are  conjointly  repudiated  before  the  law. 

" '  No  silver  in  circulation  from  1860  to  1873/  he 
says.  Now,  silver  was  in  circulation  at  that  time.  I 
know  it  as  a  fact.  I  was  a  boy  10  years  old  in  1861,  9 
years  old  in  1860  and  I  know  silver  was  in  circulation. 
There,  are  instances  in  my  life  that  implanted  it  on  my 
mind  that  makes  me  know  that,  and  you  know  it,  if 
you  were  living  at  that  time. 

"He  says  the  measure  of  value  should  not  be 
tampered  with.  I  agree  with  him.  The  measure  of 
value  from  1792,  also  during  the  continental  days  and 
up  to  1873,  were  gold  and  silver,  and  it  should  not 
have  been  tampered  with.  You  people  are  tampering 
with  the  measure  of  values.  You  tampered  with  it  in 
1873,  and  the  gold  standard  is  an  experiment.  Show 
me,  in  the  history  of  the  world,  where  it  ever  existed 
before,  except  since  1873,  and  except  since  1816  in 
England  only.  The  ages  have  had  bimetallism  at  a 
legal  ratio  between  gold  and  silver,  and  monometal- 
lism, the  gold  standard,  was  attempted  to  be  fastened 
upon  the  world  by  the  simultaneous  action  of  the  finan- 
ciers of  the  world,  beginning  with  1873. 

"  He  says  that  silver  now  bobs  up  and  down.  Of 
course  it  bobs  up  and  down  now.  It  did  not  bob  up 
and  down  before  1873.  Professor,  take  the  table  of 
ratios — comparative  ratios  between  gold  and  silver— r 
for  200  years  in  the  book  before  you,  and  you  will  find 
they  stayed  together  for  those  200  years,  and  that  silver 
6 


76  SILVER  AND  GOLD. 

did  not  bob  up  and  down,  except  the  slight  difference 
of  exchange  in  the  different  countries  and  the  slight 
difference  in  ratio  between  France  and  the  United 
States.  It  did  not  bob  up  and  down.  We  wait  you 
to  give  them  equal  rights  before  the  law,  and  then  sil- 
ver will  not  bob  up  and  down.  Of  course  it  bobs  up 
and  down  now,  and  the  monometallists  are  the  cause  of 
it — the  act  of  1873  is  the  cause  of  it.  You  say  people 
should  work  and  turn  out  property,  and  they  will  get 
their  money.  They  are  working,  but  they  can't  get 
the  money.  They  produce  the  property,  aud  find  the 
property  costs  them  what  they  get  for  it ;  that  they 
get  what  it  costs  them  to  produce. 

^'  The  farmer  finds  himself  in  the  same  fix,  and  that 
is  why  he  can't  pay  his  mortgages.  Mortgages  are  in- 
creasing. Would  they  increase,  as  they  are  now,  like 
a  cloud  threatening  the  prosperity  of  the  country,  if  it 
were  true  that  such  industry  as  the  American  citizens 
can  display  would  produce  property  that  they  could 
not  go  and  get  money  with  ?  The  trouble  is,  when 
they  have  produced  the  property,  you  have  destroyed 
the  price. 

"  The  professor  tells  a  good  story.  I  have  heard  him 
tell  the  same  story  before.  Now,  I  want  to  tell  a  story. 
It  is  true  that  if  there  is  a  bridge  across  the  stream  and 
everybody  wants  to  go  over  it  at  the  same  time,  there  is 
a  busy  day  such  as  we  would  like  to  see  in  this  country 
again,  and  they  could  not  get  over  the  bridge  at  the 
same  time.  If  there  were  two  bridges,  professor,  they 
could  get  over.  Also,  if  they  should  charge  too  much 
toll  over  one  bridge  we  might  get  over  the  other  bridge 
cheaper. 

^^  He  says  silver  is  the  property  of  the  bullion  owner 


THE  HABVBY-LAUGHLIN  DEBATE.  77 

only.  Whose  property  is  gold  ?  No  matter  who  owns 
it ;  whether  it  is  owned  by  the  citizens  of  Illinois  or 
owned  by  the  citizens  of  Colorado.  It  is  a  question  of 
wisdom  and  intelligence  as  to  what  property,  if  we  are 
going  to  have  property  money,  is  best  to  be  coined  into 
money,  and  when  that  question  is  intelligently  settled 
no  special  argument  and  no  criticism  can  be  made  upon 
it  by  pointing  to  American  citizens  as  owning  it.  If 
they  owned  our  silver  in  England,  and  England  had 
her  hand  in  the  Rocky  Mountains,  we  would  not  hear  of 
who  owns  the  silver.  It  is  a  lack  of  Americanism  in 
not  standing  up  for  our  own  product  that  I  object  to, 
when  the  intelligence  of  centuries  has  determined  that 
silver  is  a  proper  metal  for  use  as  money. 

"  He  says  goods  are  exchanged  practically  without 
money.  He  ought  to  go  down  to  Washington  and  tell 
Mr.  Cleveland  how  to  do  without  money.  He  says 
business  is  done  without  the  use  of  money.  Well,  if 
he  can  drive  these  gold  standard  fellows  to  the  position 
of  the  fiatists,  why,  we  may  reason  with  them.  If 
business  can  be  done  without  money  then  there  is 
no  reason  why  we  should  discuss  the  question  of 
redemption  money  at  all.  He  says  a  man  buys 
goods  on  one  day,  using  the  money  to  get  other 
property  on  the  same  day,  and  that  it  is  the  exchange 
of  property. 

"  The  country  merchant  comes  to  Chicago  and  buys 
goods,  and  in  the  course  of  sixty  or  ninety  days  he  pays 
for  them,  and  has  his  goods  on  his  shelf  for  a  year.  He 
must  carry  them  with  money  ;  he  must  have  money  to 
pay  for  them.  '* 

"  The  only  appropriate  illustration  that  the  professoi 
used  were  such  words  as  *  hearses,'  *  brains,'  etc.    And 


78  SILVER  AND  GOLD. 

such  reflections  which  are  in  sympathy  with  the  posi- 
tion of  the  country. 

"  He  is  not  an  international  bimetallist.  He  says 
prices  have  not  fallen  since  1873. 

Professor  Laughlin — I  didn't  say  that.  I  said  that 
prices  had  not  fallen  since  1873  because  of  lack  of  money. 

Mr.  Harvey — Well,  that  is  too  tough  for  me.  He 
says  prices  have  not  fallen  since  1873  for  lack  of  money. 
Why  have  they  fallen  ?  Is  not  property  measured  in 
money  when  everything  else  is  equal?  I  don't  think  be 
told  us  why  property  had  fallen.  He  points  to  a  map 
on  the  wall  representing  the  amount  of  clearances  in  a 
day  going  through  the  clearing-house.  I  thought  he 
was  going  on  with  the  illustration  of  the  map  and  point 
out  the  gold  in  the  country  that  it  all  rested  upon,  but 
he  didn't  do  so,  and  I  don't  understand  the  object  of 
the  illustration.  But  the  point  we  make,  gentlemen,  is 
that  credit  money  and  credits  all  are  piled  upon  redemp- 
tion or  primary  money.  When  you  run  Knder  such  a 
standard  as  that  it  is  a  part  of  the  statutory  law  of  this 
country,  it  is  regulating  us  with  reference  to  our 
finances,  and  which  we  are  reminded  of,  as  to  what  that 
standard  is,  every  time  we  look  at  one  of  our  gold  notes, 
our  gold  mortgages,  etc.;  and  when  you  pile  up  all 
those  methods  and  transactions  of  the  nation  upon  a 
primary  money  you  must  consider  the  quantity  and 
quality  of  that  primary  money,  and  that  is  the  essential 
question  and  issue  that  is  between  us  here  to-night. 
My  fifteen  minutes  are  up.     I  will  finish  this  next  time." 

"Professor  Laughlin  will  now  have  fifteen  minutes," 
said  the  chairman,  aga^ii  presenting  that  speaker,  who 
said; 

"  With  regard  to  the  figures  of  exports  and  imports 


THE  EABVBY-LAtJGHLIN  DEBATE.  T8 

from  1850  down  to  the  present  time,  I  gave  the  figures 
for  the  total  exports  and  imports  combined  in  the  year 
1872  as  $1,164,000,000,  and  in  1894  as  $1,547,000,000, 
because  the  gentleman  had  stated  that  there  had  been 
a  greater  trade  with  Europe  in  the  time  when  gold  and 
silver  had  free  coinage,  and  I  used  the  year  1872  to 
show  that  there  was  a  certain  amount  of  trade,  $1,164,- 
000,000,  and  that  to-day  we  had  a  greater  trade,  and 
that  we  do  not  have  free  coinage  of  silver. 

"The  gentleman  referred  to  a  most  extraordinary 
proposition,  which  struck  me  at  the  time  as  so  incon- 
ceivable that  I  thought  I  must  be  mistaken.  It  was  in 
regard  to  the  act  of  1878.  Now  it  happens  that  I  was 
brought  up  in  a  lawyer's  office,  and  I  studied  the  old 
common  law,  and  when  he  makes  this  statement  that 
there  never  had  existed  anywhere  in  previous  history 
any  such  statement  as  that  a  citizen  of  the  United 
States  was  affected  by  such  a  statement  as  this  in  law, 
^except  where  otherwise  expressly  stipulated  in  the 
contract,'  ^  that  citizens  in  the  United  States  were  not 
permitted  to  make  a  contract  of  any  kind  for  the  de- 
livery of  a  specific  kind  of  goods,'  I  am  amazed.  I 
suppose  it  is  one  of  the  common  law  fundamentals,  as 
old  as  any  legal  history.  The  statement,  therefore, 
that  a  statement  like  that,  recognizing  the  common  law 
of  the  country,  appeared  in  the  act  of  1878,  merely  as 
an  expression,  and  never  had  been  heard  of  before,  is 
the  most  extraordinary  exhibition  of  ignorance  of  the 
fundamental  principle  of  law,  as  we  understand  it  in 
this  Anglo-Saxon  age. 

"  Now,  he  made  the  statement  in  rebuttal  concerning 
something  I  stated  that  the  law  of  1878  prevented  silver 
from  coming  in  and  gaining  its  relative  position  again. 


80  SILVER  AND  GOLD.    . 

If  it  would  that  alone  would  raise  its  value.  Now,  the 
fact  is  that  before  1873 — the  facts  are  indisputable — ^the 
relative  market  value  of  gold  and  silver  so  varied  that 
they  did  not  remain  in  circulation  then.  I  challenge 
any  student  of  economic  or  financial  history  to  find  an 
authenticated  case  of  the  concurrent  circulation  of  gold 
and  silver  under  a  so-called  bimetallic  system  for  any 
length  of  time.  I  say  that  this  is  a  fact  indisputable — 
that  it  was  either  gold  in  circulation  or  it  was  silver 
in  circulation. 

"  I  have  furnished  here  absolute,  indisputable  proof 
from  the  French  financial  documents  to  show  that  in 
France  itself,  where  they  attempted  to  establish  what 
was  supposed  to  be  a  bimetallic  system,  they  did  not 
have  the  concurrent  circulation,  the  silver  went  out. 
They  did  not  keep  their  parity.  In  1860  the  value  of 
a  silver  dollar  in  gold  was  104.58.  The  gentleman, 
then,  must  have  been  living  in  the  plutocratic  regions 
of  those  people  who  always  paid  about  $1.04  when 
they  need  only  have  paid  $1.  Or  he  may  have  been 
keeper  of  a  museum  where  they  had  those  things  on 
exhibition. 

"  The  gentleman  suggests  that  we  have  been  tamper- 
ing with*  the  standard.  Now,  what  do  you  mean  by 
the  standard?  Why,  the  standard  by  which  prices  are 
estimated,  by  which  transactions  are  made.  Now,  there 
was  not  any  silver  in  circulation  ;  there  was  not  any 
gold  in  circulation.  The  only  standard  we  had  been 
tampering  with  was  the  greenback.  There  was  no 
change  made,  for  there  was  no  gold  and  silver  in  the 
country. 

"  Tampering  with  the  standard  is  when  we  try  to 
get  that  metal  of  the  most  unstable  kind ;  and  right  be- 


THE   HARVEY-LA  UGHLIN  DEBATB.  81 

hind  the  gentleman  is  a  chart  representing  the  gira^ 
tions  of  silver  when  it  really  has  a  chance.  In  1876^ 
irrespective  of  commodities  or  anything  else,  it 
changed  its  value  25  per  cent.  That  is  a  pretty  stand- 
ard. That  is  the  kind  of  standard  to  tamper  with.  In 
1890,  under  a  stimulation  connected  very  closely  with 
the  passage  of  the  Sherman  act  of  1890,  silver  went  up 
and  then  it  came  down  again  like  a  rocket. 

"  Now  he  spoke  of  my  chart  over  there  and  sug- 
gested that  silver  was  bobbing.  Yet,  it  has  been  bob- 
bing, and  has  gone  to  the  bottom,  and  it  is  like  the  old 
story  of  the  man  in  the  boat.  When  he  dropped  out 
of  the  boat  he  swore  it  was  the  boat  that  had  gone  up. 
He  then  says  that  we  have  spoiled  the  market  because 
men,  if  they  have  produced  goods,  cannot  sell,  and  in 
the  next  sentence  he  says  a  man  sells  for  what  it  cost 
him  to  produce,  and  yet  he  says  he  cannot  sell.  Now, 
what  is  selling  except  getting  what  it  cost  to  pro- 
duce? 

*^  Then  he  speaks  to  the  point  of  the  bridge  illus- 
tration. I  could  not  expect  to  be  understood,  even  on 
a  second  reading.  The  bridge  illustration  was  simply 
meant  to  show  that  in  a  time  of  great  panic  or  great  ex- 
citement, when  a  great  amount  of  work  has  got  to  be 
done  in  a  small  space,  that  disorder  sometimes  arises. 
It  is  perfectly  clear  that,  with  order  and  with  a  proper 
medium  of  exchange,  it  does  not  make  any  difference 
which  of  the  two  bridges  a  man  goes  over,  but  if  he 
goes  on  to  the  second  bridge  and  it  is  a  shaky  one,  and 
it  bobs  up  and  down  like  that,  he  had  better  not  get  on 
it. 

"He  also  added  that  it  was  very  un-American  to 
talk  about  gold.    Now,  we  produce  gold  as  well  aa 


82  SILVER   AND   GOLD. 

silver,  and  he  asks  who  owns  the  gold.  I  answer  ex- 
actly the  same  in  regard  to  the  matter  of  silver.  The 
bullion  owners,  the  mine  owners,  own  the  gold  bullion 
just  as  much  as  the  silver  mine  owners  own  the  silver 
bullion,  and  when  you  put  it  into  the  mint  it  does  not 
get  into  your  pocket  and  mine.  I  tell  you  there  is  an- 
other process  entirely  beyond  all  that.  The  mint  does 
not  create  any  unlimited  demand  for  gold.  The  mint 
does  not  buy  gold.  It  is  simply,  and  nothing  more, 
than  it  merely  changes  its  form  into  a  round  disk  and 
puts  a  stamp  on  it  to  indicate  an  authority,  that  it  is  a 
certain  fineness  and  weight.  That  is  all  the  mint  does. 
It  does  not  create  any  demand  for  gold,  and  gold  mine 
owners  own  their  gold  just  as  the  silver  mine  owners 
own  their  silver.  And  if  it  is  un-American,  I  say,  to 
say  the  truth,  then  I  am  an  un-American. 

"  He  objected  to  my  funereal  illustration.  I  suppose 
that  he  considered  that  if  we  were  not  going  to  have 
free  coinage  of  silver  that  was  quite  too  funereal  a 
thing  to  think  of,  and  I  haven't  any  doubt  if  you  will 
examine  into  my  illustration  very  closely  you  will  see  a 
very  much  despised  thing  called  a  rag  silver  baby  be- 
ing carried  out. 

"  He  lastly  says  that  the  fall  of  prices  since  1878 
has  not  been  accounted  for  by  me.  I  did  not  say  that 
prices  had  not  fallen  since  1873,  because  I  called  your 
attention  to  the  movement  of  prices  of  223  articles  in 
coin.  Since  1860  they  had  fallen  8  per  cent,  and  it 
gives  me  an  opportunity  to  call  attention  to  something 
which  I  did  not  have  time  to  before,  and  that  is  that 
the  fall  of  prices  began  in  1865.  It  was  at  the  time 
when  prices  were  highest  and  from  1864  and  1865  the 
movement  was  steadily  down. 


•       THE  HABVEY-LAUGHLIN  DEBATB.  88 

••Now,  if  they  are  going  to  talk  about  1873,  why 
don't  they  talk  about  1875  ?  They  were  both  under  a 
paper  money  period.  The  high  prices  were  in  1865, 
and  when  resumption  of  specie  payment  took  place 
Jan.  1,  1879,  prices  were  exactly  on  the  same  level  as 
they  were  in  I860.  But  you  start  with  silver  in  1879, 
and  compare  its  price  with  what  prices  were  in  1879 
after  the  resumption  of  specie  payment,  and  you  can 
see  the  difference  and  the  change  in  the  purchasing 
price  of  silver  as  compared  with  the  money. 

"  Now,  what  was  the  cause  of  the  fall  in  the  values 
of  the  commodities  ?  It  seems  to  me  that  before  an 
audience  of  men  engaged  in  industrial  operations,  men 
who  know  something  about  manufacturing,  who  know 
something  about  the  way  in  which  industrial  improve- 
ments have  been  introduced  into  every  factory,  in 
every  furnace,  in  every  cotton  and  woolen  mill  in  this 
country  in  the  last  ten  or  fifteen  years,  that  the 
change  produced  in  the  cheaper  cost  of  productions, 
in  improvements  and  inventions  in  the  last  fifteen  or 
twenty-five  years  is  the  striking  marvel  of  this  century. 
Many  a  man  and  owner  of  a  mill  I  have  heard  say 
that  it  made  him  tired  to  keep  up  in  this  race  of  im- 
provements. The  moment  that  he  has  his  mills  ad- 
justed somebody  else  had  got  something  new  and  he 
had  to  change  his  mill  and  his  men  all  over  again. 

"  One  man  in  the  iron  industry  in  Pittsburg  wrote 
to  me  that  since  1873  he  could  mention  no  less  than 
500  different  inventions  all  united  together  to  change 
the  price  of  production  of  iron.  You  all  know  how 
the  price  has  gone  down  How  about  the  price  of 
steel  rails,  which  has  gone  down  until  steel  is  really 
no  more  valuable  than  iron  was  then  ?    I  need  not  go 


84  SILVER   AND  GOLD. 

over  this  te  a  body  of  men  who  know  the  movements 
of  commercial  prices ;  the  reduction  of  prices  from  the 
change  of  cost  has  been  phenomenal.  It  has  been  one 
of  the  most  diflScult  things  of  my  life  to  understand  why 
prices  have  not  fallen  more  than  8  per  cent,  since  1860. 
The  only  possible  excuse  for  it  that  I  can  see  is  the 
enormous  production  of  gold.  In  1893  the  annual  pro- 
duction of  gold  was  larger  than  any  time  in  the  history 
of  the  world,  over  $155,000,000.  And  the  directors  of 
the  mints  show  us  that  the  reports  of  1894  will  show  a 
still  larger  production  of  gold." 

"Mr.  Harvey  will  now  have  five  minutes  for  the 
close  of  the  discussion,"  said  the  chairman,  announcing 
the  author,  who  said  : 

•'  Professor  Laughlin  refers  again  to  the  bridge  story. 
I  want  to  do  the  sam'fe  thing.  If  one  bridge  is  rickety 
ve  use  the  other  while  we  put  the  bad  one  in  order. 
If  we  have  only  one  and  that  is  out  of  order,  we  have 
to  wade  or  swim.  That  is  the  trouble  now.  We  have 
only  one  bridge,  and  the  administration  and  Mr.  Cleve- 
land have  hold  of  one  end  and  the  Rothschilds  have 
the  other  and  they  have  drawn  our  end  away  from  us. 

"  Professor  Laughlin  refers  to  the  purchase  price  of 
wages,  etc.  There  is  contention  on  between  the  labor 
unions  of  the  country  and  the  financial  and  other 
trusts  of  the  country,  and  it  is  a  deadly  struggle,  as 
we  know,  and  one  of  the  worst  things  of  that  struggle 
is  the  4,000,000  of  idle  laborers  in  this  country.  In 
order  to  hold  up  the  wages  of  the  country  it  is  produc- 
ing idle  labor.  It  is  better  to  all  have  v^ages  and  all 
have  work  and  something  to  buy  than  it  is  to  have 
wages  forced  up  by  unions  and  not  enough  people  have 
work  to  dow     That  is  our  reply  to  that. 


fBB  BAftVlBT-LATiGHXIN  DEBATB.  «5 

^"".enS That  n:  ,"•    ^^1'  ^«  ^°«  «^  *^«  «P«-1  - 

"Prnf  T    "■  P'^^'^y  ^^"  come  to. 

«fited  brrl  ?''""  '"^^  ^^^'^'^  '^^"^'J  "«t  be  ben- 
Bays  the  /r'"  '''"'"  °^  '"''''  ^"''  '"'"  ""'  ^' 
oheatina  c       u"".  *^^  ^^J''"^  *o  benefit  themselves  by 

follow  tl.»f  V"?  !  '"''*'^  standard.    Now,  we  cannot 

ThTs  w    1     ''^  ^*'^^°'    ^«  S«*  '°«'  '^  ^«  '^«-" 
gathering  1h         *°**  °^  ''^^  arguments  and  tlie  formal 
exDre«;^  became  an  informal  one  after  the  chairman's 

Pressioa  of  tianks  to  the  speakers. 


S6  SILVEB  AND  GOLD. 


CHAPTER  II. 

BY  8ENAT0B  J.  N.  DOLPH  OF  OREGON. 

It  was  in  the  summer  of  1893  that  President  Cleve- 
land called  an  extra  session  of  Congress,  to  secure  the 
repeal  of  the  purchasing  clause  of  the  Sherman  act. 
In  the  discussions  which  followed  this  proposal,  both 
in  the  Senate  and  in  the  House  of  Representatives,  the 
leading  economists  in  Congress  took  active  part.  Some 
of  them  have  selected  the  speeches  delivered  on  those 
occasions  as  the  most  satisfactory  and  careful  interpre- 
tation of  their  views,  and  portions  of  them  are  there- 
fore included  here. 

Tuesday,  August  8,  when  the  Senate  had  under  con- 
sideration the  President's  message.  Senator  J.  N. 
Dolph  of  Oregon  spoke  in  part  as  follows : 

The  President  of  the  United  States,  moved  thereto 
by  the  business  depression  and  financial  disturbances 
everywhere  prevailing,  and  assuming  that  the  present 
condition  of  the  country  is  the  result  of  the  operation 
of  the  so-called  Sherman  law,  has  convened  congress 
in  extraordinary  session  and  urged  upon  it  in  his  mes- 
sage of  to-day  the  immediate  repeal  of  that  law. 
Whether  or  not  it  would  be  wise  under  existing  cir- 
cumstances to  repeal  this  law,  the  claim  or  the  assump- 
tion that  it  is  the  principal  cause  of  the  prevailing 
business  and  financial  condition  of  the  country  should 
not  be  permitted  to  go  unchallenged. 

The   present    financial    and  industrial  condition  of 


8ENATOB  J.  N.   DOLPH.  87 

this  country  should  surprise  no  one.  It  has  been  pre- 
dicted for  years  by  those  who  believe  the  prosperity  of 
the  country  can  only  be  maintained  by  the  protection 
of  American  industries.  The  present  condition  is  the 
logical  result  of  the  success  at  the  presidential  election 
of  November  last  of  the  party  which  declares  that  pro- 
tection of  American  industries  is  robbery,  and  stands 
pledged  to  reverse  the  policy  which  for  more  than 
thirty  years  has  given  us  an  era  of  prosperity  such  as 
this  or  no  other  country  has  ever  before  enjoyed. 

Over  all  this  great  industrial  system  hangs  a  dark 
cloud  of  uncertainty  and  fear,  an  impending  blow 
threatening  its  destruction.  And  so  the  wheels  of 
progress  are  stopped.  The  fires  are  suffered  to  go  out 
in  furnaceSf  the  machinery  in  great  establishments  is 
idle,  and  idle  men  seek  employment.  The  importer 
will  not  import  dutiable  goods  when  he  fears  that  soon 
his  competitors  can  import  them  free  of  duty.  The 
manufacturer  will  not  produce  his  products  in  excess 
of  the  present  demand  when  he  fears  that  his  surplus 
product  may  be  compelled  to  compete  with  free  foreign 
products.  He  will  buy  raw  materials  for  present  needs 
only  while  the  prospect  is  before  him  of  soon  being 
able  to  supply  himself  with  raw  materials  of  foreign 
production  free  of  duty ;  and  so  the  importer,  the  mer- 
chant, the  manufacturer  to  avoid  disaster  curtail  their 
operations. 

The  wholesale  merchants,  the  bankers,  and  all  classes 
of  creditors  press  collections,  settlements  are  forced, 
and  financial  losses,  business  failures,  and  bankruptcies 
are  the  result.  The  Sherman  law  is  not  the  sole  or 
even  the  principal  cause  of  the  present  financial  depres- 
sion, and  its  repeal  will  not  cure  our  financial  and  in- 


88  SILYBB  AND  GOLD. 

dustrial  ills.  No  permanent  improvement  in  the  indus* 
trial  situation  need  be  expected  while  the  destruction 
of  the  protective  system  is  threatened  or  feared.  No 
legislation  by  which  domestic  industries  will  be  injured 
or  destroyed,  by  which  the  products  of  foreign  labor 
will  be  admitted  to  free  or  to  greater  competition  with 
domestic  products,  which  will  result  in  transferring  do- 
mestic industries  to  foreign  countries,  and  giving  labor 
now  performed  by  American  citizens  to  foreigners,  will 
help  to  restore  confidence  or  bring  business  prosperity. 

After  the  Democratic  majority  in  congress  shall  have 
settled  upon  a  tariff  policy,  and  formulated  and  enacted 
its  tariff  revision,  whether  such  revision  shall  be  gen- 
eral or  be  destructive  only  with  a  few  American  indus- 
tries, such  as  the  wool  and  tin-plate  industries,  the 
business  of  the  country  will  adjust  itself  to  the  changes, 
and  we  may  enjoy  a  halting,  intermittent  prosperity 
with  lower  wages  to  laborers,  but  a  sound,  permanent 
prosperity  in  this  country  will  not,  in  my  judgment,  be 
again  enjoyed  until  we  are  assured  of  the  success  of  the 
Republican  party  and  its  control  of  both  Houses  of 
Congress,  and  that  a  policy  is  to  be  adopted  and  main- 
tained by  which  the  industries,  the  capital,  and  the  la- 
bor of  this  country  are  to  be  preferred  to  those  of  for- 
eign countries. 

Necessity  for  the  repeal  of  the  Sherman  law,  if  such 
a  necessity  exists,  has  been  created  by  the  success  of 
the  Democratic  party,  the  threat  of  free  trade  and  the 
predictions  by  the  Democratic  press  and  Democratic 
politicians  of  disaster  to  follow  from  the  operation  of 
the  Sherman  law,  made  in  a  systematic  effort  to  secure 
the  repeal  of  that  law  at  the  last  session  of  congress 
under  a  Republican  Administration. 


8EKATOB  J.   N.  DOLPH.  89 

There  are  so  many  widely  differing  views  upon  the 
silver  question,  so  many  diverse  financial  plans  pro- 
posed, so  many  erroneous  opinions  concerning  our  coin- 
age laws,  our  financial  system,  and  the  character  and 
functions  of  money,  that  it  may  be  useful  to  refer 
briefly  to  some  of  the  elementary  principles  of  political 
economy  which  can  not  be  disregarded  by  congress  if 
it  would  provide  the  country  with  a  sound,  safe,  and 
honest  currency. 

Labor  employed  in  the  creation  of  useful  articles  is 
the  source  of  all  wealth.  A  useful  product  of  labor  is 
a  thing  of  value.  It  may  be  a  product  of  agriculture^ 
for  which  the  farmer  plows  and  sows  and  reaps,  avail- 
ing himself  of  what  nature  has  furnished  him  at  hand  ; 
the  fertile  soil,  the  warmth  of  the  sun,  the  early  and 
later  rains,  or  it  may  be  the  gold  and  silver  for  which 
the  miner  patiently  delves  in  the  great  treasure  vaults 
of  nature,  or  the  more  useful  products  of  iron  and  coal 
which  require  the  labor  of  men  to  extract  them  from 
the  earth  and  fit  them  for  use,  or  it  may  be  a  coat,  a 
hat,  a  watch,  or  a  steam  engine.  All  the  things  by 
which  we  are  fed,  clothed,  and  sheltered,  which  add  to 
our  convenience,  comfort,  and  pleasure  are  the  products 
of  labor.  They  are  valuable  because  they  are  adapted 
to  the- use  of  man.  But  one  man  can  not  make  all  the 
things  he  needs,  or  at  least  he  does  not.  Hence  we 
have  diversity  of  labor,  and  one  man  mines  gold  and 
silver,  another  cultivates  the  soil,  another  raises  sheep 
and  grows  wool,  another  manufactures  cloth,  another 
manufactures  clothing,  and  so  on. 

Now,  the  man  who  works  the  mine  or  grows  wool 
must  have  food  and  clothing  and  many  other  things. 
If  there  were  no  money  or  medium  of  exchange  the 


90  glLVEB   AND  GOLD. 

manufacturer  of  cloth  might  buy  wool  of  the  wool- 
grower  and  give  him  cloth  in  exchange,  but  the  wool- 
grower  might  not  need  the  cloth.  He  would  need  pro- 
visions and  clothing.  He  might  take  cloth  and  find  a 
manufacturer  of  clothing  who  would  exchange  clothing 
for  it,  and  he  might  possibly  exchange  cloth  for  gro- 
ceries, and  the  groceryman  might  in  turn  exchange 
cloth  for  something  that  he  needed ;  but  this  would  be  a 
very  tedious  and  unsatisfactory  manner  of  conducting 
commercial  exchanges.  Hence  the  necessity  of  a  me- 
dium of  exchange — a  tool  of  exchange — so  that  when 
the  wool-grower  carries  his  wool  to  the  manufacturer 
of  cloth  or  to  some  middleman  and  sells  it,  instead  of 
taking  cloth  in  exchange  for  it,  he  can  receive  this  me- 
dium of  exchange  to  the  amount  of  the  value  of  his 
wool,  and  this  medium  can  in  turn  be  exchanged  for 
any  other  commodity  which  he  may  need. 

This  medium  we  call  money.  If  we  could  conceive 
of  the  first  community  which  invented  money  assem- 
bling together  to  choose  such  a  medium  we  could  prob- 
ably obtain  a  pretty  good  idea  of  why  gold  and  silver 
came  to  be  selected.  Such  a  ^medium  should  possess 
considerable  intrinsic  value  ;  that  is,  be  capable  of  be- 
ing used  for  a  great  many  useful  purposes.  It  should 
be  tolerably  scarce,  and  hard  to  obtain,  so  as  to  be  pro- 
portionately valuable,  easily  transported,  and  pass  cur- 
rently from  hand  to  hand.  It  should  be  plenty  enough, 
however,  to  answer  the  requirements  of  commerce,  and 
it  should  be  capable  of  being  easily  subdivided  and 
changed  in  form  Grold  seems  to  possess  all  the  essen- 
tial requirements  for  money,  and  it  is  undoubtedly  for 
iihis  reason  that  it  was  selected.  Silver  partakes  in 
8om«  degree  of  the  same  quality,  although  it  is  more 


RICHAKD  P.    BLAND, 


I 


X.-'.  V-^-:^^.  V'>^ 


SEKATOB  J.  K.   DOLPH.  08 

abundant  and  more  easily  obtained.  Therefore  it  has 
been  selected  and  used  for  money  and  made  a  legal 
tender  for  the  payment  of  debts,  in  some  countries  for 
all  sums  and  in  others  for  limited  sums  only. 

Sometimes  in  the  exigencies  of  commerce  the  pur- 
chaser may  not  have  this  medium  of  exchangef  money, 
in  sufficient  quantities  to  pay  for  his  purchases,  and 
hence  he  buys  on  credit. 

When  the  war  of  the  rebellion  broke  out  it  required 
a  great  deal  of  money  to  carry  it  on,  and  there  were 
many  reasons  which  rendered  it  difficult  for  the  govern- 
ment to  obtain  money,  that  is,  gold  and  silver.  In  its 
extremity  the  United  States,  to  enable  itself  to  meet 
its  engagements,  to  pay  the  soldiers,  to  furnish  arms, 
transportation,  and  supplies,  not  having  gold  and  silver 
enough,  issued  its  promise  to  pay  money  in  the  future. 
Some  of  these  were  promises  to  pay  certain  amounts 
of  money  at  the  expiration  of  a  fixed  period  with  in- 
terest semi-annually  at  fixed  rates.  These  were  the 
government  bonds.  Then  it  issued  treasury  notes  or 
greenbacks  of  various  denominations,  so  as  to  pass  from 
hand  to  hand  as  money,  which  were  nothing  but  ac- 
knowledgments of  indebtedness,  without  any  time  be- 
ing fixed  for  their  payment  or  any  agreement  to  pay 
interest.  Congress  made  these  notes  legal  tender  for 
the  payment  of  private  debts. 

As  the  legal  tenders  possessed  no  intrMisic  value  and 
were  debts  payable  only  at  the  pleasure  of  the  United 
States,  and  as  the  war  progressed  portions  o^  the  peo- 
ple began  to  fear  that  the  South  would  prevail  and  that 
the  States  remaining  in  the  Union  would  be  either  \in- 
willing  or  unable  to  redeem  these  promises,  they  rap- 
idly depreciated  in  value  until  they  were  worth  xtp 
6 


94  SILVER  AKD  GOLD. 

more  than  85  cents  on  a  dollar ;  but  as  the  prospects  of 
subduing  the  rebellion  and  maintaining  the  Union  in^ 
creased  they  gradually  appreciated  in  value,  and  after 
the  war  was  closed  continued  to  appreciate  until  they 
reached  about  the  value  of  90  cents  on  the  dollar; 
that  is,  a  dollar  in  greenbacks  was  worth  90  cents  in 
gold. 

Congress  after  a  while  passed  the  resumption  act — 
that  is,  fixed  a  day  when  the  government  would  pay 
its  notes  in  coin  if  presented  to  the  Secretary  of  the 
Treasury,  and  provided  one  hundred  millions  of  gold  in 
the  vaults  of  the  treasury  to  pay  them.  But  all  at 
once  the  legal  tender  notes  became  worth  their  face  in 
gold  and  the  gold  in  the  treasury  was  not  needed. 
The  people  preferred  to  keep  the  promises  of  the  gov* 
ernment  to  pay  the  money  when  the  government  was 
ready  to  redeem  them. 

The  legal  tenders  and  all  treasury  notes  are  evi- 
dences of  debt  of  the  government  possess  no  intrinsic 
value.  They  are  made  by  law  to  perform  some  of  the 
functions  of  money.  They  are  made  legal  tender  for 
the  payment  of  private  debts  and  public  dues,  and 
their  value  depends  entirely  upon  the  provisions  made 
by  law  for  their  redemption  in  coin — that  is  to  say 
upon  the  fact  that  they  ar<^  convertible  into  that  which 
has  intrinsic  value. 

We  have  several  kinds  of  currency  in  circulation, 
performing  the  functions  or  some  of  the  functions  of 
money.  There  is  the  gold  coin  double  eagle,  eagles, 
half  eagles,  quarter  eagles,  etc.  These  gold  coins  are 
legal  currency — that  is,  they  have  been  declared  by 
law  to  be. a  legal  tender  for  the  payment  of  private 
d^bts  and  public  dues,  but  they  also  possess  such  in* 


SENATOR  J.  N.  DOLPH.  95 

trinslc  value  that  if  you  should  melt  them  u^  into  bul- 
h'on  the  bullion  would  be  just  as  valuable  as  the  coin. 
In  fact,  when  they  are  exported,  the  fact  that  they  are 
coined  with  the  devices  provided  by  our  laws  upon 
them  adds  nothing  to  their  value  ;  their  value  depends 
entirely  upon  their  weight. 

Then  we  have  the  silver  coin,  which  is  also  by  law 
made  a  legal  tender  for  the  payment  of  private  debts, 
and  is  receivable  for  public  dues.  The  intrinsic  value 
of  the  silver  dollar,  like  the  intrinsic  value  of  the  gold 
dollar,  is  the  value  of  the  bullion  it  contains,  which  at 
")reseut  is  about  60  cents  in  gold. 

The  silver  dollar  in  the  payment  of  debts  and  public 
iues  is  required  by  law  to  pass  for  one  hundred  cents. 
Forty  cents  of  the  value  of  every  silver  dollar  is  based 
upon  the  credit  of  the  government.  It  is  true  that  the 
government  has  not  agreed  to  redeem  the  silver  cur- 
rency in  gold  upon  presentation  to  the  treasury,  but  it 
has  promised  to  receive  it  as  the  equivalent  of  gold  for 
public  dues,  of  which  we  collect  about  $600,000,000  an- 
nually. This  is  a  qualified  redemption  in  gold,  and- 
this  provision,  with  the  general  expectation  that  the 
government  will  maintain  this  currency  upon  a  parity 
with  gold,  has  so  far  kept  the  silver  dollar  at  par  with 
the  gold  dollar. 

There  are  also  the  gold  and  silver  certificates,  which 
perform  the  functions  of  money.  They  are  receipts  for 
gold  and  silver  deposited  in  the  treasury.  They  are 
redeemable  upon  presentation  at  the  treasury  in  gold 
or  silver  coin  as  the  case  may  require.  They  are  like 
wheat  receipts  issued  by  warehousemen,  which  call  for 
a  given  number  of  bushels  of  wheat  upon  presentation, 
and  pass  from  hand  to  hand  instead  of  the  wheat,  unt-'. 


96  SILVER  AND  GOLD. 

some  holder  is  ready  to  present  them  to  the  warehouse* 
man  and  exchange  them  for  the  wheat. 

Any  person  may  take  gold  not  less  than  $10  in 
amount  to  the  treasury  and  deposit  it  and  receive  a 
gold  certificate,  and  the  gold  is  kept  in  the  treasury, 
to  be  returned  to  the  holder  of  the  receipt  when  it  is 
presented.  The  same  thing  is  true  of  silver  certifi- 
cates. 

Then  there  are  the  legal  tender  notes,  possessing,  as 
I  have  said,  no  intrinsic  value,  but  redeemable  in  gold 
on  presentation  to  the  treasury.  They  are,  therefore, 
worth  their  face  in  gold.  There  are  about  f  346,000,- 
000  of  this  currency. 

We  have  also  another  kind  of  national  currency,  the 
treasury  notes  issued  under  act  of  1890.  They  were 
issued  for  the  purchase  of  silver  bullion  at  the  market 
price  at  the  time  of  purchase.  The  silver  bullion  is 
stored  in  the  treasury  vaults  theoretically,  if  not  le- 
gally, as  security  for  the  payment  of  the  notes,  and  the 
law  provides  that  the  notes  shall  be  redeemed  upon 
presentation  in  coin — ^gold  or  silver  coin — at  the  option 
of  the  Secretary  of  the  Treasury.  The  gold  coin  and 
the  gold  certificates  constitute  an  absolutely  safe  cur- 
rency, for  the  coin  is  intrinsically  worth  its  face,  and 
the  certificates  can  be  exchanged  for  gold  upon  presen- 
tation  at  the  treasury. 

The  legal  tender  notes  are  equally  safe,  for  they  are 
redeemable  upon  presentation  at  the  treasury  in  gold. 
A  hundred  millions  of  dollars  in  gold  is  kept  in  the 
treasury  as  a  reserve  for  the  payment  of  these  notes, 
and  the  Secretary  of  the  Treasury  is  authorized  to  sell 
bonds  for  gold,  if  necessary,  for  their  redemption.  The 
silver  coin  and  silver  certificates  and  treasury  notes 


( 


SBNATOB  J.  N.  DOLPH.  9*^ 

Stand  on  a  different  footing.  The  intrinsic  value  of  the 
silver  coin  in  gold,  as  I  have  said,  is  about  60  cents  on 
the  dollar.  The  silver  certificates  are  redeemable  in 
silver.  The  treasury  notes  may  be  paid  in  silver  coin. 
There  is  no  provision  of  law  for  redeeming  this  silver 
coin  and  currency  in  gold,  except  the  provision  for  the 
receipt  of  it  as  the  equivalent  of  gold  in  payment  of 
public  dues. 

If  congress  should  repeal  the  law  requiring  silver 
coin  and  silver  currency  to  be  received  for  public  dues, 
the  value  of  the  silver  coin,  the  silver  certificate,  and 
the  treasury  notes  would  at  once  depreciate  until  they 
would  be  worth  no  more  on  the  dollar  than  the  value 
of  the  silver  bullion  in  a  silver  dollar.  To  repeat,  the 
gold  and  silver  coin  possess  intrinsic  value.  The  gold 
coin  is  intrinsically  worth  its  face ;  the  silver  coins  are 
intrinsically  worth  about  60  per  cent,  of  their  face.  The 
gold  certificates  and  the  silver  certificates  are  the  obli- 
gations of  the  government,  and  are  valuable  because 
they  are  convertible  on  demand  into  gold  and  silver. 
The  legal  tender  and  treasury  notes  are  evidences  of 
debt  of  the  government,  but  possess  no  intrinsic  value 
and  are  valuable  only  because  the  legal  tender  notes  can 
be  converted  into  gold  upon  presentation  to  the  treas- 
ury, and  the  Treasury  notes  can  be  converted  into 
coin,  gold  or  silver  coin,  at  the  option  of  the  treasury, 
upon  presentation  for  payment. 

While  silver  and  gold  possess  intrinsic  value,  and 
for  that  reason,  in  part,  are  adapted  to  use  as  money,  it 
must  not  be  supposed  they  have  a  fixed  relative  value ; 
that  is  to  say,  that  a  certain  amount  of  silver  is  always 
worth  a  certain  amount  of  gold.  Considered  as  bullion, 
they  are  but  products  of  labor,  just  aa  wheat,  potatoesi 


96  SILYEB  AKD  GOLD. 

cotton,  and  wool  are  products  of  labor,  and  it  would  be 
no  more  absurd  to  suppose  that  the  relative  value  be- 
tween potatoes  and  wheat,  or  cotton  and  wool  is  fixed, 
so  that  2  or  4  bushels  of  potatoes  are  always  equal  in 
value  to  the  value  of  a  bushel  of  wheat,  or  that  5  pounds 
of  cotton  is  always  equal  in  value  to  a  pound  of  wool, 
than  to  suppose  that  a  given  number  of  ounces  of  sil- 
ver, say  16  or  20,  is  always  equal  in  value  to  an  ounce 
of  gold. 

The  value  of  each  metal,  like  the  value  of  every 
other  product  of  human  labor,  is  fixed  by  the  supply 
and  the  demand.  This  is  the  reason  why  the  use  of 
the  two  metals  as  money  under  free  coinage  of  both  is 
impossible  without  the  concurrent  use  of  the  two  met- 
als as  money,  at  an  agreed  ratio,  by  a  sufficient  number 
of  commercial  nations  to  maintain  the  ratio  of  their  in- 
trinsic value  at  the  legal  ratio  agreed  upon. 

Some  persons  who  demand  free  coinage  of  silver  in 
the  United  States  at  the  ratio  of  16  to  1  appear  to  be- 
lieve that  gold  and  silver  have  naturally  a  fixed  value 
relatively  one  to  the  other,  and  that  the  United  States 
adopted  that  natural  relative  value  by  the  coinage  acts 
of  1834  and  1837.  The  relative  intrinsic  value  of  the 
two  metals,  as  I  have  said,  is  fixed  by  the  universal  and 
imperative  law  which  fixes  the  price  of  every  product 
of  human  industry  in  the  world*s  market. 

The  value  of  silver  as  compared  with  gold  has  been, 
with  the  exception  of  a  comparatively  brief  period,  con- 
stantly fluctuating  since  authentic  history  began.  Five 
hundred  years  before  the  Christian  era  an  ounce  of 
gold  was  worth  13  ounces  of  silver.  At  the  beginning 
of  the  Christian  era  an  ounce  of  gold  was  worth  9 
ounces  of  silver.    Three  hundred  and  fifty  years  later  it 


tequired  15  ounces  of  silver  to  buy  1  ounce  of  gold. 
Two  hundred  and  fifty  years  later  still  an  ounce  of 
gold  was  worth  18  ounces  of  silver.  About  the  close 
of  the  fifteenth  century  the  ratio  was  about  1  to  10 ;  by 
1688  the  value  of  gold  had  again  increased  until  an 
ounce  of  gold  was  worth  16  ounces  of  silver.  For 
nearly  two  centuries  this  ratio  was  substantially  main- 
tained by  the  use  of  both  metals  as  money  by  the  prin- 
cipal commercial  countries  of  Europe.  When  silver 
was  demonetized  by  Germany  and  its  coinage  suspended 
by  France  and  the  Latin  Union  this  ratio  was  no  longer 
maintained,  and  the  relative  value  of  silver  to  gold  has 
since  greatly  fallen  and  has  been  constantly  fluctua- 
ting. 

Until  an  international  argreement  can  be  secured 
between  the  principal  commercial  countries  of  the  world 
for  the  free  coinage  of  silver  at  an  agreed  ratio  so  that 
the  intrinsic  value  of  the  silver  product  of  the  world 
as  measured  in  gold  can  be  maintained  at  the  legal  ratio 
agreed  upon,  each  nation  must  determine  for  itself 
whether  it  will  have  a  gold  or  a  silver  standard.  A 
double  standard  is  impossible.  The  two  metals  will 
mot  circulate  together  unless  the  parity  of  their  value 
^an  be  maintained.  To-day  the  following  foreign 
countries  have  the  silver  standard :  India,  China,  Mex- 
ico, Japan,  and  most  of  the  Central  and  South  American 
States.  The  following  have  gold  standards:  Brazil, 
British  possessions  in  North  America,  Denmark,  Egypt, 
Finland,  German  Empire,  Great  Britain,  Liberia,  Nor- 
way, Portugal,  Sweden,  Turkey.  The  followiug  have 
legally  a  gold  and  silver  standard,  but  in  fact  a  gold 
standard.  They  have  no  free  coinage  of  silver,  and 
silver  coin  is  maintained  in  domestic  circulation  on  a 


100  SILVER  AND  GOLD. 

parity  with  gold  by  some  provision  for  its  redemption 
in  gold  or  by  its  receipt  for  public  dues :  Argentine 
Republic,  Belgium,  Chile,  Cuba,  France,  Greece,  Haiti, 
Italy,  Netherlands,  Spain,  and  S  witzerland.  Those  people 
who  propose  free  coinage  for  the  United  States  propose 
that  we  shall  change  our  measure  of  value  from  gold 
to  silver  and  join  India,  Mexico,  China,  and  other  coun- 
tries having  a  silver  standard,  and  that  silver  shall  be 
the  basis  upon  which  all  the  transactions  in  this  country 
shall  be  conducted. 

Our  own  experience  is  sufficient  to  show  that  it  is 
impossible  under  free  coinage  to  maintain  in  circulation 
both  gold  and  silver  when  either  is  undervalued  by  the 
legal  ratio.  The  coinage  law  of  1792  established  the 
ratio  of  1  to  15  between  gold  and  silver.  The  intention 
of  congress  was  to  adopt  the  commercial  ratio  between 
the  two  metals  in  the  markets  of  the  world.  But  gold 
was  undervalued  and  could  not  be  kept  in  the  country, 
and,  its  place  was  supplied  with  Spanish  milled  dollars 
and  small,  abraded  silver  coins.  The  ratio  of  France 
being  at  the  same  time  1  to  15|,  France  took  all  our 
gold  under  a  law  that  is  universal  and  inevitable.  To 
secure  the  retention  and  circulation  of  gold  in  this 
country  the  acts  of  1834  and  1837  were  passed.  The 
ratio  under  those  laws  was  1  to  16.  Gold  was  over- 
valued and  silver  left  the  country  under  the  operation 
of  the  same  law.  To  enable  us  to  retain  in  this  countrj'^ 
silver  subsidiary  coins  the  act  of  1853  was  passed,  re- 
ducing the  amount  of  silver  in  half  dollars  and  other 
fractions  of  a  dollar,  discontinuing  free  coinage  of  sub- 
sidiary coin  and  providing  for  its  coinage  by  the  govern- 
ment from  silver  purchased  by  it,  upon  which  it  ro* 
ceived  the  profit. 


SENATOR  J.   N.   DOLPfl.  -  .iSJt' 

t>oe4  anyone  suppose  for  a  moment  that  when  con- 
gress established  a  mint  and  fixed  a  ratio  between  gold 
and  silver  at  15  to  1  on  the  advice  of  Hamilton,  or 
when  in  1834  the  ratio  of  16  to  1  was  adopted  for  sil- 
ver and  gold,  if  silver  and  gold  had  been  of  the  value 
relatively  to  each  other  they  are  to-day  the  ratio  of  15 
to  1  or  16  to  1  would  have  been  adopted  ?  It  is  famil- 
iar history  that  Hamilton  endeavored  to  adopt  as  the 
legal  ratio  the  then  commercial  ratio  between  the  two 
metals  in  the  markets  of  the  world,  and  that  congress 
in  1834  designed  to  make  the  ratio  such  that  gold  would 
remain  in  this  country,  whether  under  it  we  could  keep 
silver  or  not. 

Some  persons  have  proposed  that  a  new  legal  ratio 
between  gold  and  silver  should  be  established  by  law, 
say  a  ratio  of  20  to  1,  and  the  mints  be  opened  for  the 
free  coinage  of  silver  at  this  ratio  ;  but  this  proposition 
is  impracticable,  would  surely  give  us  a  silver  standard 
and  drive  gold  out  of  circulation,  would  not  increase 
the  price  of  silver  bullion  or  benefit  silver  producers, 
and  would  be  no  better  for  the  country  than  free  coin- 
age at  the  present  legal  ratio.  If  we  are  to  abandon 
gold  as  the  standard,  and  to  adopt  the  silver  standard, 
it  is  not  material  whether  a  silver  dollar  is  worth  50  per 
cent,  or  90  per  cent,  of  the  gold  dollar.  If  we  could 
maintain  in  the  world's  markets  the  actual  commercial 
and  intrinsic  ratio  of  value  between  gold  and  silver  at 
SQme  legal  ratio  we  could  adopt,  then  the  question 
would  be  solved ;  but  we  can  not. 

This  can  only  be  done  by  the  united  action  of  the 
principal  commercial  nations  of  the  world.  If  we  should 
adopt  by  law  a  legal  ratio,  which  at  the  time  was  the 
same  as  the  commercial  ratio  of  value  of  the  two  metala. 


l02  SILVER  AKD  GOLD. 

before  a  dollar  could  be  coined  under  it,  silver,  which 
Quctuates  every  day  in  price,  might  fall  until  the  legal 
ratio  and  the  ratio  of  the  intrinsic  value  of  the  two 
metals  would  be  widely  different ;  and  under  free  coin- 
age at  the  ratio  adopted  only  one  metal  would  be  coined 
or  remain  in  circulation.  Such  a  proposition  shows  a 
failure  upon  the  part  of  those  who  make  it  to  compre- 
hend the  first  principles  of  the  silver  question. 

Others  have  advocated  free  coinage  of  both  gold 
und  silver  without  an  attempt  to  make  the  silver  dollar 
the  equivalent  of  the  gold  dollar,  but  letting  the  in- 
trinsic value  of  gold  and  silver  fix  the  current  money 
value  of  gold  and  silver  coin ;  in  other  words,  that  we 
should  have  two  standards,  a  gold  standard  and  a  silver 
standard;  but  this  is  impracticable.  In  such  a  case 
one  or  the  other  of  the  two  metals  would  have  to  be 
measured  by  the  other,  or  we  would  require  a  third 
standard  to  measure  them  both. 

Gold  being  the  standard  of  value  of  all  the  great 
commercial  countries,  and  the  medium  in  which  public 
dues  must  be  paid  and  foreign  debts  settled,  the  silver 
coin  under  such  circumstances  would  be  but  a  commod- 
ity in  foreign  countries.  Gold  would  disappear,  and 
the  depreciated  silver  currency  be  our  standard  of  value, 
and  the  measure  of  commercial  transactions  or  our  ex- 
changes conducted  on  the  silver  standard  would  be  mere 
barter. 

The  government  stamp  can  not  create  good  money. 
All  money  must  possess  intrinsic  value  or  be  convertible 
into  that  which  has  intrinsic  value.  After  the  dis- 
covery of  gold  on  the  Pacific  coast,  gold  dust  was 
largely  used  as  a  medium  of  exchange,  and  before  the 
establishment  of  the  branch  mint  at  San  FranciacQ 


8EKATOB  J.  N.  DOLPH.  108 

private  parties  manufactured  gold  coins  of  the  weight 
and  fineness  of  the  United  States  gold  coins«  and  in  sub- 
divisions as  low  as  25  cents.  They  were  not  made  in  im- 
itation of  the  United  States  coin  and  were  not  legal  ten- 
der, but  they  were  worth  as  much,  and  passed  as  currency 
everywhere,  as  the  gold  coins  of  the  United  States. 

When  the  branch  mint  was  established  the  govern- 
ment did  that  for  the  public  convenience  which  private 
parties  before  had  done.  This  incident  shows  that 
while  the  stamp  of  the  government,  and  legal  tender 
enactments  are  necessary,  to  make  legal  tender  money, 
it  requires  neither  the  government  stamp  nor  statutes 
to  make  a  convenient  medium  of  exchange  when  that 
medium  possesses  the  necessary  intrinsic  value,  while, 
on  the  other  hand,  the  depreciation  of  the  legal  tender 
notes  during  the  war  shows  that  neither  the  govern- 
ment  stamp  nor  legislative  enactments  making  a  cur- 
rency legal  tender  can  always  make  good  money. 
Neither  the  government  stamp  nor  their  legal  tender 
qualities  gave  the  legal  tender  notes  the  value  they  did 
possess  as  a  medium  of  exchange,  but  this  was  imparted 
to  them  by  the  promise  of  the  government  to  redeem 
them  in  money,  and  when  the  day  of  payment  was 
fixed  and  provision  was  made  for  their  payment  they 
became  good  for  their  face,  because  they  were  con- 
vertible into  gold  at  par. 

If  private  parties  were  to  coin  silver  bullion  into 
eoin  of  the  weight  and  fineness  of  the  standard  silver 
dollars,  such  coin  would  be  worth  no  more  than  its  mar- 
ket value  as  bullion  and  would  not  circulate  anywhere 
as  a  medium  of  exchange. 

The  silver  rupee  of  India,  the  Mexican  dollar,  and 
the  silver  coins  of  Chin  ,  ahd  of  every  other  country  hay- 


104  SILVER  AND  GOLD, 

ing  free  coiDage  of  silver,  are  worth  no  more  even  in  the 
countries  where  they  are  coined  than  the  value  of  the  sil- 
ver they  contain.  The  reason  that  the  standard  silver  dol- 
lar of  the  United  States  is  worth  100  cents  in  the  United 
States  and  even  in  Mexico,  although  it  contains  less  sil- 
ver than  the  Mexican  dollar,  is  because  the  United  States 
has  put  the  standard  silver  dollar  into  circulation,  vir- 
tually saying  this  coin,  though  intrinsically  worth  only 
what  the  silver  it  contains  is  worth  as  bullion  in  the 
markets  of  the  world,  is  issued  upon  the  pledge  of  the 
government  that  it  shall  be  accepted  as  the  equivalent 
of  a  gold  dollar  in  payment  of  all  government  dues. 

If  congress  were  to  provide  that  all  public  dues 
should  be  paid  in  gold,  and  substitute  no  provision  for 
the  redemption  of  silver  currency  in  gold,  the  standard 
silver  dollar  would  become  immediately  worth  less  in 
the  United  States  and  everywhere  than  the  Mexican 
silver  dollar. 

By  the  free  coinage  of  silver  it  is  proposed  that 
anyone  shall  be  permitted  to  take  to  the  mints  of  the 
United  States  871J  grains  of  pure  silver,  now  worth, 
say,  60  cents,  and  receive  for  it  a  standard  silver  dollar, 
which  is  to  be  a  legal  tender  in  payment  for  private 
debts  at  its  face  and  receivable  as  the  equivalent  of  a 
gold  dollar  for  public  dues,  or,  as  provided  in  the  Stew- 
art bill  of  last  congress,  which  passed  the  senate,  re- 
ceive for  his  60  cents'  worth  of  silver  bullion  a  treasury 
note  which  is  a  legal  tender  in  payment  of  private 
debts  and  receivable  in  payment  of  public  dues  at  its 
face.  The  whole  object  of  the  Stewart  bill  was  to  make 
the  government  the  purchaser  of  all  silver  bullion  of- 
fered at  the  mints  at  the  rate  of  100  cents  for  60  cents' 
worth  of  bullion. 


SENATOB  J.   N.   DOLPH.  106 

If  there  are  now  premonitions  of  the  depreciation 
of  the  silver  dollar  when  it  is  coined  only  by  the  gov- 
ernmenty  and  its  coinage  is  limited,  and  its  cost  to  the 
government  is  only  its  intrinsic  value,  what  would  hap- 
pen if  the  mints  were  thrown  open  for  the  coinage  of 
silver  on  private  account  and  private  parties  presenting 
the  bullion  to  the  mints  were  to  receive  a  profit  equal 
to  the  difference  between  the  value  of  tHe  bullion  of- 
fered and  the  face  value  of  the  coin  or  treasury  notes 
received  in  exchange  for  it  and  the  government  were  to 
lose  an  amount  equal  to  the  profit  of  individuals  ? 

It  seems  impossible  that  anyone  should  suppose  for 
a  moment  that  the  silver  dollar  or  treasury  notes  re- 
3eived  in  exchange  for  silver  bullion  under  such  a  law 
could  be  maintained  equal  to  a  gold  dollar.  It  could 
not  be.  Before  the  first  dollar  under  a  free  coinage 
law  could  be  coined,  the  silver  dollar  could  be  worth  no 
more  than  the  value  of  the  bullion  it  contained. 

The  merits  or  demerits  of  any  measure  for  the  use 
of  silver  as  money  to-day  must  be  determined  by  exist- 
ing conditions.  The  question  whether  previous  financial 
legislation  has  been  wise  or  unwise  is  immaterial.  The 
ratio  of  the  value  of  silver  to  gold  to-day,  and  not  tlie 
ratio  in  1873,  is  the  important  matter  for  consideration. 
Since  1878  silver  has  depreciated  in  value  about  40  per 
cent.  The  product  of  silver  increased  from  63,000,000 
ounces  in  1878  to  140,000,000  ounces  in  1891.  The 
coinage  of  silver  has  been  discontinued  for  many  years 
by  the  principal  countries  of  Europe.  Many  persons 
believe  that  with  free  coinage  of  silver  we  would  be 
flooded  with  the  world's  silver. 

The  stock  of  full  legal  tender  silver  coin  in  the  prin- 
oipal  countries  of  Europe  approximates  $1,100,000,000^ 


106  SILVER  AND  GOLD. 

of  which  $430,000,000  are  stored  in  the  vaults  of  five 
banks,  and  could  be  thrown  upon  our  markets  without 
delay.  I  have  never  feared  that  free  coinage  of  silver 
in  the  United  States  would  cause  the  world^s  silver  to 
be  dumped  upon  us,  because  I  have  never  believed  that 
with  free  coinage  the  silver  dollar  would  possess  any 
greater  value  than  the  bullion  it  contained. 

Of.  course,  if  under  free  coinage  the  silver  dollar 
could  be  maintained  the  equivalent  in  value  of  a  gold 
dollar  we  would  speedily  get  all  the  silver  of  the  world, 
and  citizens  of  the  United  States  and  subjects  of  foreign 
countries  and  foreign  governments  themselves  would 
undoubtedly  avail  themselves  of  the  privilege  of  pre- 
senting at  our  mints  60  cents'  worth  of  silver,  receiving 
for  it  a  legal  tender  note,  and  converting  that  into  gold. 
The  United  States  would  become  the  purchaser  of  all 
the  silver  in  the  world — ^bullion,  coin,  and  old  silver- 
ware— paying  a  dollar  in  gold  for  60  cents'  worth. 

But  it  is  absurd  to  suppose  that  if  everyone  was 
permitted  to  carry  silver  bullion  to  the  mints  to  be 
coined  there  woyld  be  any  alchemy  in  the  process  that 
would  double  the  value  of  silver  bullion.  It  is  as  abso- 
lutely certain  as  anything  caji  be  that  under  free  coin- 
age the  value  of  the  silver  dollar  would  depreciate  un- 
til it  was  worth  no  more  as  money  than  the  value  of 
the  bullion  contained  in  it.  As  soon  as  this  occurred, 
the  profits  to  silver  owners  in  exchanging  silver  bullion 
for  silver  coin  would  cease  and  there  would  be  no 
longer  any  inducer  ^)t  to  take  silver  bullion  to  the 
mint  to  be  coined.  Silver,  like  every  product  of  hu- 
man labor,  would  be  sold  in  the  markets  for  what  it 
would  bring  for  use  in  the  arts  or  for  money. 

The   amount  of  silver  coined   under  free   coinage 


8ENAT0E  J.   N.  DOLPH.  107 

would  be  variable,  and  would  depend  upon  a  variety 
of  circumstances.  But  little  over  eight  million  silver 
dollars  were  coined  from  the  establishment  of  the  mint 
until  1873,  and  it  is  not  likely  any  great  amount  would 
now  be  coined  under  free  coinage.  With  free  coinage 
of  silver^  silver  would  be  the  standard  for  all  our  busi- 
ness transactions.  Our  $700,000,000  of  gold  would  be 
withdrawn  from  circulation ;  the  circulating  medium 
would  be  greatly  contracted,  and  the  products  of  in- 
dustry greatly  diminished.  Free  coinage  would  not  in- 
crease the  price  in  gold  of  any  commodity.  The  price 
of  everything  we  import  would  still  necessarily  be  paid 
in  gold.  If  more  silver  dollars  were  received  by  the 
producer  for  his  products,  more  silver  dollars  would  be 
required  to  purchase  everything  which  he  consumes. 

For  instance,  if  the  farmer  should  receive  $1  in 
silver  for  a  bushel  of  wheat,  that  silver  dollar  would 
go  no  further  than  60  cents  in  gold  or  so  much  gold  as 
in  the  world's  markets  would  buy  a  silver  dollar.  The 
value  of  property  measured  in  silver  would  be  at  once 
advanced  to  offset  the  depreciation  in  the  standard  of 
value.  The  last  thing  to  be  advanced  would  be  the 
price  of  labor.  Although  the  price  of  everything  con- 
sumed by  the  laborer  would  be  nearly  doubled  in 
value,  it  would  be  a  long  time,  and  after  many  a 
struggle,  before  the  laborer  would  succeed  in  getting 
two  silver  dollars  in  lieu  of  the  one  gold  dollar  he  now 
receives  for  his  labor. 

*  All  producers  and  laborers  would  lose  by  the 
change  in  our  standard  of  value,  and  only  bankers, 
brokers,  money-changers,  and  middlemen  would  profit 
by  it.  All  salaries  and  pensions  would  be  paid  in  silver 
and  all  appropriations  of  the  government  expanded  in 


108 


SILVER  AND  GOLD. 


silver.  The  disturbance  of  our  financial  condition 
which  would  result  from  adopting  a  silver  standard 
would  produce  great  financial  stringency,  force  the  im- 
mediate collection  of  debts,  increase  the  rate  of  interest, 
demoralize  business,  throw  labor  out  of  employment, 
impair  the  credit  of  the  government,  bring  home  for 
collection  our  State,  municipal,  and  corporation  bonds 
held  abroad,  impair  confidence,  bring  upon  us  ruin  and 
bankruptcy. 

If  existing  debts  were  paid  in  depreciated  silver  it 
would  be  robbing  the  creditor,  because  they  have  all 
been  contracted  with  reference  to  the  present  standard, 
and  95  per  cent,  of  them  since  the  great  depreciation 
in  silver. 

India,  one  of  the  countries  until  recently  having 
free  coinage  of  silver  or  coining  silver  on  private  ac- 
count, has  hiwherto  been  a  great  consumer  of  silver 
bullion  for  ornaments  and  coinage,  and  has  been  pointed 
to  by  the  advocates  of  free  coinage  as  an  example  of 
prosperity  with  free  coinage  of  silver.  The  amount 
coined  has  been  large,  but  not  uniform,  some  years  be- 
ing a  hundred  per  cent,  more  than  others.  The  follow- 
ing table  shows  the  amount,  expressed  in  dollars,  of 
silver  annually  minted  during  the  period  of  sixteen 
years,  and  shows  the  consumption  of  silver  in  India 
for  coin : 


1875 $23,830,686 


1876. 

1877. 
1878. 
1879. 


12,410,636 
30,r>18,415 
78,741,556 
28,122,004 

1880 40,002173 

1881 20,682,625 

1883 29,386,322 

1883 24,927,400 

1884 17,363,531 


1885 548,487,114 

1886 27.121,414 

1887 44,142,013 

1888 36,297,132 

1889 37,927,814 

1890 57,931,323 

1891 32,670,498 

Total  17  years...  590,562,659 

Aunnal  average. 34,150,744 


aEORGE  G.  vjai. 


SBNATOB  J.  K.  DOLPH.  Ill 

The  amount  coined  in  1890  is  estimated  at  $30,000,' 
000.  The  silver  rupee  of  India  contains  186  grains  of 
pure  silver ;  the  half,  quarter,  and  eighth  rupees  are  of 
corresponding  weights.  The  coinage  of  both  metals 
until  the  recent  action  of  the  India  government  was 
practically  free,  provided  the  amount  presented  was 
equal  to  50  tolos  of  gold  or  a  thousand  tolos  in  silver. 
There  was  a  duty  of  1  per  cent,  upon  all  gold  and  sil* 
ver  brought  to  the  mints.  Gold  was  not  coined  in  any 
considerable  amount,  and  the  business  of  the  country 
was  conducted  upon  a  silver  standard.  The  stoppage 
of  the  coinage  of  silver  on  private  account  in  India  is 
not  an  abandonment  of  the  silver  standard.  Silver  is 
still  the  standard,  and  will  continue  to  be  whether  the 
government  coins  silver  on  its  own  account  or  not. 

It  is  said  this  action  of  the  government  of  India  is 
intended  to  have  the  effect  to  prevent  the  further  de- 
cline of  the  value  of  the  rupee,  but  upon  what  this  ex- 
pectation is  based  is  not  stated.  The  value  of  the 
rupee  will  be  fixed  hereafter,  as  heretofore,  by  its  value 
as  silver  bullion  in  the  London  Market  It  will  still 
be  measured  in  all  London  and  in  all  foreign  trans- 
actions by  gold,  and  the  discontinuance  of  free  coinage 
by  throwing  the  silver  bullion  heretofore  coined  in 
India  on  private  account  on  the  world's  markets  has 
depreciated,  and  will  continue  to  depreciate,  the  in- 
trinsic value  of  the  rupee. 

The  claim  sometimes  made  that  silver  has  not 
fallen  in  value  in  India,  and  that  the  silver  rupee  in 
the  interior  of  India  will  purchase  as  much  wheat  or  as 
much  of  the  other  products  of  labor  is  absurd ;  it  is 
incredible.  The  price  of  wheat  in  London  is  fixed  in 
gold  by  the  world's  supply  and  demand.  It  is  impos- 
T 


112  SniVBB  AND  GOLD. 

sible  that  there  could  be  to  the  exporter  of  wheat 
from  India  a  profit  equal  to  the  fall  in  the  price  of  sil- 
ver since  1878.  Such  a  state  of  things  could  not  exist 
ten  days  in  any  country  under  the  sun.  Competition 
among  English  wheat-buyers  would  speedily  raise,  the 
price  of  wheat  in  India  to  an  approximation  of  its 
gold  price  in  London. 

I  am  informed  that  the  price  of  wheat  is  fixed  in  the 
export  cities  of  India  by  the  price  in  London  and  the 
cost  of  transportation,  insurance,  etc.  The  statement 
is  undoubtedly  an  invention  intended  to  make  farmers 
believe  that  in  some  way  the  price  of  their  commodities 
is  affected  by  the  depression  of  silver.  Not  every 
country  which  uses  silver  as  money  has  a  silver  stand- 
ard. In  the  United  States  we  have  about  $500,000,000 
of  silver  currency,  but  our  standard  is  gold,  and  the 
difference  between  our  gold  and  the  intrinsic  value  o^ 
our  silver  currency  rests  upon  the  obligation  of  thd 
government  to  redeem  it  in  gold. 

England,  although  having  a  gold  standard  sincr 
1816,  has  about  f  100,000,000  of  silver,  subsidiary  coin 
used  in  small  transactions.  France  has  $700,000,00ft 
of  silver  and  $900,000,000  of  gold,  but  has  a  gold 
standard,  and  her  silver  passes  at  par  upon  the  faith  oi 
its  redemption,  and  an  actual  redemption  in  gold,  and 
this  is  the  case  in  every  country  which  maintains  in 
circulation  silver  upon  a  parity  with  gold.  In  all  these 
countries  silver  is  redeemable  in  some  manner  in  gold ; 
free  coinage  of  silver  has  been  discontinued,  and  the 
stock  of  silver  is  not  increased.  On  the  contrary,  in 
every  country  where  there  is  free  coinage  of  silver  the 
purchasing  power  of  silver  coin  is  precisely  the  market 
value  of  the  bullion  it  contains. 


8KNATOB  J.  K.  DOLPH.  118 

*' There  is  persistent  and  gross  misrepresentation 
concerning  the  manner  in  which  the  act  of  1878  dis- 
continuing the  free  coinage  of  the  silver  dollar  was 
enacted.  The  recent  article  by  ex-Secretary  Boutwell 
in  the  Boston  Herald  giving  the  facts  concerning  the 
manner  in  which  the  law  of  1873  was  passed  should 
set  the  question  at  rest,  but  it  will  not.  I  quote  the 
following  from  ex-Secretary  Boutwell's  article : 

*'  The  act  known  as  the  act  for  the  demonetization 
of  silver  was  passed  in  1878,  and  upon  a  distinct  rec- 
ommendation made  in  my  annual  report  to  congress 
in  December,  1872.  The  statement  so  often  made  and 
so  generally  believed,  that  the  provision  was  introduced 
and  passed  surreptitiously,  was  without  any  foundation, 
as  will  appear  from  quotations  from  my  report,  which 
I  shall  incorporate  in  this  article. 

**  The  country  had  due  and  full  notice  of  the  policy 
proposed,  and,  if  the  friends  of  a  silver  currency  were 
ignorant  of  the  movement,  the  fault  was  their  own. 
Not  only  was  there  no  concealment,  but,  on  the  other 
hand,  the  change  proposed  was  announced  early  and 
definitely.  For  myself,  I  can  say  that  I  never  hesitated 
to  avow  the  authorship  of  the  measure,  and  I  have 
been  readv  always  to  assign  the  reasons  by  which  I  was 
influenced. 

"  In  1860  the  American  silver  dollar  was  more  val- 
usible  than  the  gold  dollar,  accordiug  to  the  statute 
ratio  between  the  metals,  in  the  sum  of  about  4  cents. 
From  that  time  onward  the  difference  in  favor  of  silver 
diminished  graduaHy,  and  in  1872  the  difference  had 
disappeared. 

**At  that  time  the  power  drill  had  been  invented 
and  its  value  established.  The  use  of  dynamite  was 
well  understood,  and  the  number  and  richness  of  the 
silver  mines  in  the  Rocky  Mountains  justified  the  con- 
clusion that  silver  would  deteriorate  in  value  with  each 
succeeding  year. 


114  SILVEB  AND  GOLD. 

"  On  this  theory  of  the  then  future  my  policy  was 
based.  We  were  then  on  a  gold  basis  as  far  as  the  use 
of  the  metals  had  a  part  in  our  financial  affairs;  we 
were  a  principal  producer  of  gold,  and  the  most  import- 
ant steps  had  been  taken  in  the  work  of  bringing  the 
treasury  note  to  the  standard  of  gold  coin. 

^^  In  the  same  report  I  advised  the  coinage  of  a  sil- 
ver dollar,  known  as  the  trade  dollar,  in  value  superior 
to  the  Mexican  dollar,  which  was  then  in  use  almost 
exclusively  in  the  commerce  of  China  and  the  East 
Indies.  This  coin,  which  was  not  current  in  the  United 
States,  became  the  means  of  a  very  considerable  export 
of  silver  to  the  East. 

"  These  two  measures  were  designed  to  maintain  a 
gold  basis,  in  competition  with  England,  our  principal 
rival,  and  to  substitute  American  silver  for  Mexican 
silver  in  our  dealings  with  the  countiies  using  that 
metal." 

The  operation  of  the  Bland  act  and  the  Sherman 
ktw  was  recently  stated  in  an  authorized  interview 
with  Secretary  Carlisle.     He  said : 

"The  operations  of  the  United  States  Mint  com- 
menced in  1792,  and  from  that  time  to  1873,  a  period 
of  eighty-one  years,  the  total  amount  of  silver  dollars 
coined  was  $8,045,838.  In  1873  the  coinage  was 
stopped  by  act  of  Congress,  but  in  1878  it  was  resumed 
under  the  so-called  Bland-Allison  act,  by  the  terms  of 
which  the  Secretary  of  the  Treasury  was  directed  to 
purchase  and  coin  into  standard  silver  dollars  of  412| 
grains  each,  not  less  than  $2,000,000  worth  nor  more 
than  $4,000,000  worth  of  silver  bullion  each  month, 
and  between  the  date  of  the  act  and  the  14th  of  July, 
1890,  a  period  of  twelve  years,  there  was  coined  $378,- 
166,793. 

''In  addition  to  this  there  has  been  coined  from 
trade  dollars  $5,088,472,  and  from  the  seigniorage  of 
bullion  purchased  and  coined  under  the  act  July  14, 
1890,  the  sum  of  $6,641,109,  making  in  the  aggregate 


SENATOfi  J.  K.  DOL^H.  llS 

$889,886,874  in  full  legal-tender  silver  money  issued 
by  the  government  since  1878.  Of  this  amount  only 
$58,016,000  was  in  actual  circulation  on  the  first  day 
of  the  present  month,  the  remainder  being  held  in  the 
treasury  as  part  of  the  assets  of  the  government,  or 
being  represented  by  outstanding  certificates. 

"The  act  of  July  14,  1890,  requires  the  Secretary 
of  the  Treasury  to  purchase  4,600,000  fine  ounces  of 
silver  bullion  each  month,  and  it  provided  that  he 
should  continue  the  coinage  of  silver  dollars,  at  the 
rate  of  $2,000,000  per  month,  till  the  1st' day  of  July, 
1891,  and  under  this  act  there  has  been  coined  $29,- 
408,461,  which  makes  a  total  coinage  of  silver  dollars 
under  all  acts  since  1878,  $419,294,835,  or  more  than 
fifty  times  as  much  as  was  coined  during  a  previous 
period  of  eighty-one  years.  In  addition  to  the  silver 
bullion  purchased  by  the  government  since  1878  and 
coined  as  above  stated,  the  Secretary  of  the  Treasury 
has  purchased  under  the  act  of  July  14,  1890,  and  now 
holds  in  the  vaults  of  the  treasury  uncoined,  124,292,- 
582  fine  ounces  of  silver  bullion,  which  cost  the  people 
of  the  United  States  $114,229,920,  and  is  worth  to-day 
at  the  market  price  of  silver  $108,411,886,  thus  show- 
mg  a  loss  of  $10,888,580. 

"  By  the  terms  of  the  act  the  Secretary  was  required 
to  pay  for  all  silver  bullion  purchased  by  the  issue  of 
new  United  States  Treasury  notes,  payable  in  coin, 
and  it  provided  that  upon  demand  of  the  holder  of  any 
such  notes  they  should  be  redeemable  in  gold  or  silver 
coin,  at  the  discretion  of  the  Secretary,  it  being  in  the 
language  of  the  act  the  established  policy  of  the 
United  States  to  maintain  the  two  metals  on  a  parity 
with  each  other  upon  the  present  legal  ratio,  or  such 
ratio  as  may  be  provided  by  law.  In  the  execution  of 
this  policy  of  Congress  it  is  the  duty  of  the  Secretary 
when  the  necessity  arises  to  exercise  all  the  powers 
conferred  upon  him  by  law  in  order  to  keep  the  gov- 
ernment in  a  condition  to  redeem  its  obligations  in 
such  coin  as  may  be  demanded,  and  to  prevent  the  de- 
preciation of  either  as  compared  with  the  other. 


116  dILVBB  Am>  OOIil). 

"The  records  of  the  treasury  department  show  that 
during  the  eleven  months  beginning  May  31, 1892,  and 
ending  May  1,  1898,  the  coin  treasury  notes  issued  for 
the  purchase  of  silver  bullion  under  the  act  of  July  14, 
1890,  amounted  to  149,861,184,  and  that  during  the 
same  period  the  amount  of  such  notes  paid  in  gold  was 
$47,745,173.  It  thus  appears  that  all  silver  bullion 
purchased  during  that  time,  except  $2,216,011  worth, 
was  paid  for  in  gold,  while  the  bullion  itself  is  stored 
in  the  vaults  of  the  treasury,  and  can  neither  be  sold 
nor  used  for  the  payment  of  any  kind  of  obligation. 
How  long  the  government  shall  thus  be  compelled  to 
purchase  silver  bullion  and  increase  the  public  debt  by 
issuing  coin  obligations  in  payment  for  it  is  a  question 
that  congress  alone  can  answer.  It  is  evident  that  if 
the  policy  is  continued  and  the  Secretary  of  the  Treas- 
ury be  compelled  to  issue  bonds  or  otherwise  increase 
the  interest-bearing  debt,  it  will  be  done  for  the  pur- 

Eose  of  procuring  gold  with  which  to  pay  for  silver 
ullion  purchased  under  the  act  referred  to." 

There  is  to  be  added  to  our  stock  of  silver  bullion 
the  purchases  made  since  this  interview  was  had.  The 
intrinsic  value  of  the  silver  dollar  is  to-day  $0.56; 
present  value  of  an  ounce  of  silver,  $0,726.  Under  the 
Bland  and  Sherman  acts  we  have  purchased  460,000,000 
ounces  of  silver  at  a  loss,  at  the  present  prices  of  silver 
bullion,  of  $134,957,000. 

One  of  the  causes  that  sends  gold  abroad  is  a  bal- 
ance of  trade  against  us.  Gold  is  the  standard  of  all 
the  commercial  countries  of  Europe,  and  all  our  im- 
ports from  there  must  be  paid  for  in  gold. 

A  tarifip  that  causes  what  we  consume  to  be  made 
at  home  tends  to  increase  our  exports  and  diminish  our 
imports,  and  to  bring  gold  to  us  instead  of  sending  it 
out  of  the  countrjT*    Then  American  travelers  must 


dMl^Atott  3.  K.  iX>L^H.  lit 

provide  gold  for  their  expenses  in  Europe,  and  they 
carry  a  great  deal  of  gold  abroad  annually,  but  the 
principal  cause  of  the  drain  of  gold  from  this  country 
is  the  fact  that  we  are  debtors  to  the  people  of  foreign 
countries,  and  when  they  demand  payment  we  must 
send  the  gold  abroad  to  liquidate  our  indebtedness. 

During  our  recent  financial  disturbances  there  was 
a  large  exportation  of  gold.  The  stock  of  free  gold  in 
the  treasury,  that  is,  the  amount  of  gold  over  and  above 
the  9100,000,000  reserved  for  the  redemption  of  legal 
treasury  notes,  was  exhausted  and  the  reserve  was  en- 
croached upon.  This  condition,  in  my  judgment,  was 
largely  caused  by  the  fear  of  our  European  creditors 
that  we  would  go  to  the  silver  standard  in  the  United 
States,  and  the  consequent  disposition  on  their  part  to 
recall  their  inyestments  in  this  country.  If  we  should 
adopt  free  coinage  of  silver  and  go  to  a  silver  basis, 
whenever  an  American  citizen  should  go  abroad  he 
would  be  compelled  to  exchange  the  silver  currency  of 
the  United  States  for  gold,  paying  a  premium  equal  to 
the  difference  between  the  intrinsic  yalue  of  the  two 
metals,  and  the  same  thing  would  be  true  concerning 
the  payment  of  any  balance  of  trade  against  us,  and  of 
the  payment  of  our  foreign  creditors. 

There  is  a  great  deal  of  absurd  talk  about  the 
friends  of  silver  and  the  enemies  of  silver.  I  am 
neither  a  friend  of  gold  or  an  enemy  of  silver.  I  am 
in  favor  of  the  use  of  the  two  metals  as  money  when- 
ever possible.  The  advocates  of  free  coinage  denounce 
those  who  oppose  free  coinage  of  silver  as  the  enemies 
of  silver,  and  as  gold  bugs,  etc.  Nothing  could  be 
more  unjust.  No  legislation  favored  by  those  who 
believe  that  the  gold  standard  should  be  maintained 


118  SLLYEB  AND  GOLD. 

is  for  the  purpose  of   discriminating  against  eithei 
metal. 

I  have  no  doubt  but  that  the  repeal  of  the  Sherman 
law,  the  cessation  of  the  purchase  of  silver  by  the  gov- 
ernment, and  the  throwing  of  the  4,500,000  ounces  of 
silver  monthly  now  purchased  by  the  United  States 
upon  the  markets  of  the  world,  would  still  further  de- 
preciate the  price  of  silver ;  but  the  Sherman  law  has 
failed  to  keep  up  the  price  of  silver  bullion,  and  threat- 
ens under  existing  conditions,  for  which  the  law  is  not 
responsible,  to  force  us  to  a  silver  standard. 

I  do  not  believe  that  the  free  coinage  of  silver 
would  maintain  the  price  of  silver  bullion  or  benefit 
silver  f<*>lucers,  while  it  would  bring  disaster  upon  the 
countrj  I  claim  to  have  been  a  better  friend  to  the 
producers  of  silver  than  those  who  have  favored  free 
coinage.  I  have  never  thought  that  the  purchase  of 
silver  by  the  government  and  coining  it  into  silver 
standard  dollars  required  to  be  received  at  their  face 
for  public  and  private  dues,  or  storing  it  in  the  vaults 
of  the  treasury,  was  in  accordance  with  sound  financial 
principles ;  in  other  words,  that  such  a  course  could  be 
continued  indefinitely,  and  the  parity  between  the  gold 
and  silver  dollar  be  maintained. 

I  believe,  however,  with  the  continuance  in  power 
of  the  Republican  party,  the  Sherman  law  might  have 
continued  in  force  for  some  time  to  come  without  any 
disastrous  effects.  The  repeal  of  the  Sherman  law 
without  any  substitute  by  throwing  upon  the  markets 
of  the  world  monthly  4,500,000  ounces  of  silver  bullion 
now  purchased  monthly  by  the  government,  should  the 
present  production  of  silver  continue,  will  necessarily 
greatly  depreciate  the  price  of  silver  bullion* 


8EKAT0B  J.  K.   DOLPH.  119 

It  will  stop  the  increase  of  our  circulating  medium 
by  the  issue  of  treasury  notes.  It  will  not,  in  my  judg- 
ment, restore  confidence  or  greatly  improve  the  busi- 
ness situation.  I  fear,  on  the  contrary,  that  it  will 
make  it  worse.  It  may,  however,  prevent  what  is 
threatened,  viz,  the  parting  company  of  the  silver  and 
gold  dollar,  and  enable  the  government  to  float  its  load 
of  silver  currency  upon  our  present  stock  of  gold. 
This  will  only  be  the  case,  however,  by  the  repeal  of 
the  law  unaccompanied  by  any  measure  calculated  to 
shake  confidence  in  the  financial  ability  of  the  govern- 
ment, and  by  such  a  decided  action  of  congress  as  to 
.  make  it  certain  that  there  is  no  further  danger  of  free 
coinage  of  silver,  and  that  it  is  the  policy  of  the  govern- 
ment to  maintain  the  gold  standard,  and  to  redeem  and 
retire  the  silver  currency  by  substituting  treasury  notes 
redeemable  in  gold  on  presentation,  or  to  maintain  our 
present  circulation  of  silver  currency  at  par  with  gold 
under  the  present  or  additional  provisions  for  its  re- 
demption in  gold. 

Some  persons  talk  about  the  redemption  of  our  sil- 
ver currency  in  gold  as  if  it  were,  like  our  legal  tender 
currency,  redeemable  on  presentation.  Others  ignore 
entirely  the  provision  which  has  been  made  by  law  for 
the  redemption  of  silver  currency  in  gold,  and  point  to 
the  fact  that  standard  silver  dollars  pass  current  at 
their  face  iu  this  country  as  evidence  that  free  coinage 
of  silver  would  make  the  legal  ratio  in  the  United 
States  between  gold  and  silver  16  to  1,  the  actual  ratio 
of  the  intrinsic  value  of  the  two  metals. 

I  do  not  believe  that  the  Secretary  of  the  Treasury 
is  authorized  under  the  Sherman  act  to  redeem  the 
treasury  notes  issued  under  it  in  gold  when  the  gold 


120  dlLVER  AKb  aoLt). 

serve  is  encroached  upon,  or  to  sell  bonds  to  obtain 
gold  to  redeem  them.  They  should,  under  the  law, 
have  been  paid  in  silver  coin  when  there  was  no  longer 
gold  with  which  to  redeem  them  without  encroaching 
upon  the  gold  reserve,  but  the  course  pursued  by  the 
Secretary  of  the  Treasury  no  doubt  helped  to  maintain 
the  parity  between  gold  and  silver. 

In  several  of  the  States  and  Territories  one  of  the 
principal  industries  is  silver  mining.  The  owners  of 
silver  mines  and  those  engaged  in  dependent  industries 
are  interested  in  having  a  market  for  the  products  of 
the  mines  at  prices  for  silver  bullion  which  will  make 
mining  profitable  and  the  mining  regions  prosperous. 
Their  reasonable  demands  upon  the  general  govern- 
ment, in  this  regard,  have  heretofore  been  more  than 
complied  with. 

Under  the  Bland  act  the  government  became  a 
forced  purchaser  of  silver  to  the  value  of  $2,000,000  per 
month,  and  under  the  Sherman  act  of  4,500,000  ounces 
of  silver  bullion  per  month,  all  in  a  vain  endeavor  to 
prevent  the  further  depression  of  silver  bullion.  I 
greatly  sympathize  with  these  people,  and  if  some  one 
can  devise  a  scheme  by  which  silver  mining  can  be  pro- 
tected without  injustice  to  other  interests  quite  as  de- 
serving and  without  danger  to  our  finances  and  our 
credit,  I  should  be  very  glad  to  support  it. 

It  is  evident  that  the  Sherman  law,  even  if  it  could 
be  safely  continued,  will  not  be  sufficient  to  keep  up 
the  price  of  silver  bullion,  and  owing  to  its  deprecia- 
tion, silver  mines  are  already  closing  down.  Undoubt- 
edly the  law  has  helped  to  sustain  the  price  of  silver  by 
withdrawing  from  the  world's  market  so  large  an 
amount  of  silver  bullion. 


BEirATOB  J.  K.  t>OLPTL 


121 


While  I  have  reluctantly  concluded,  notwithstand- 
ing the  disastrous  effect  of  the  repeal  on  the  price  of 
silver  bullion  and  the  silver-mining  industry,  that  the 
Sherman  law  should  be  repealed  to  prevent  greater  dis- 
aster, I  am  not  willing  to  admit  that  that  law  is  re- 
sponsible for  existing  financial  and  business  conditions, 
and  I  do  not  expect  its  repeal  will  greatly  relieve  us 
from  such  conditions.  The  proposition  to  repeal  the 
provision  of  the  Sherman  law,  authorizing  the  purchase 
of  silver  bullion,  to  receive  my  support,  must  not  be 
connected  with  any  other  measure  which  would  be 
equally  or  more  injurious  to  the  credit  of  the  govern- 
ment and  the  finances  of  the  country,  such  as  the  re- 
moval of  the  tax  upon  State-bank  issues  or  free  coinage 
of  silver 


122  SILVER  AND  OOLD. 


CHAPTER  III. 

BY  SENATOR  GEOBGB  G.  YBST  OF  MISSOUBL 

To  quote  from  the  Republican  platform  adopted  at 
Minneapolis,  June,  1892:  *^The  American  people, 
from  tradition  and  interest,  favor  bimetallism,  and  the 
Republican  party  demands  the  use  of  both  gold  and 
silver  as  standard  money,  with  restrictions  and  under 
such  provisions,  to  be  determined  by  legislation,  as  will 
secure  the  maintenance  of  the  parity  of  values  of  the 
two  metals,  so  that  the  purchasing  ^nd  debt^paying 
power  of  the  dollar,  whether  of  silver,  gold,  or  paper, 
shall  be  at  all  times  equal.  The  interests  of  the  pro- 
ducers of  the  countrv,  its  farmers  and  its  workingmen, 
demand  that  every  dollar,  paper  or  coin,  issued  by  the 
government,  shall  be  as  good  as  any  other.  We  com. 
mend  the  wise  and  patriotic  steps  already  taken  by  oui 
government  to  secure  an  international  conference  to 
adopt  such  measures  as  will  insure  a  parity  of  value  be- 
tween golc'  iK*^<\  silver  for  use  as  money  throughout  the 
world." 

The  Democratic  convention  at  Chicago,  June,  1892 ; 
*^  We  hold  to  the  use  of  both  gold  and  silver  as  the 
standard  money  of  the  country,  and  to  the  coinage  of 
both  gold  and  silver  without  discriminating  against 
either  metal  or  charge  for  mintage,  but  the  dollar  unit 
of  coinage  of  both  metals  must  be  of  equal  intrinsic 
and  exchangeable  value,  or  be  adjusted  through  inter- 
national agreement,  or  by  such  safeguards  of  legislation 
as  shall  insure  the  maintenance  of  the  parity  of  the  two 
metals,  and  the  equal  power  of  every  dollar  at  all  times 
in  the  markets,  and  in  payment  of  debt ;  and  we  de- 
mand that  all  paper  currency  shall  be  kept  at  par  with 
and  redeemable  in  such  coin.    We   insist  upon   thii 


8BNATOB  080BGB  G.  VEST.         .  128 

policy  «i8  especially  necessary  for  the  protection  of  the 
farmera  and  laboring  classes,  the  first  and  most  defense- 
less, victims  of  unstable  money  and  a  fluctuating  cur- 
rency." 

I  assume  that  aft^r  reading  the  platforms  of  the  two 
great  political  organizations  of  the  country,  no  one  can 
intimate  that  there  is  anything  partisan  in  the  joint  res- 
olution which  I  have  offered.  To  vote  against  this 
resolution,  whether  that  vote  come  from  one  side  of  the 
Chamber  or  the  other,  is  to  declare  to  the  people  of  the 
United  States  what  is  believed  already  by  many  of 
chem,  that  the  platforms  of  political  parties  are  mere 
traps  to  catch  votes,  without  sincerity  and  without 
honesty.  It  is  time  that  the  people  should  know 
whether  politics  is  a  juggle  and  fraud,  or  whether, 
when  the  great  political  parties  which  seek  to  control 
the  destinies  of  a  free  people  meet  in  council  and  make 
solemn  declaration  of  policy  and  principle,  they  are 
worthy  of  confidence. 

We  are  told  that  the  repeal  of  the  so-called  Sherman 
act,  or  the  purchasing  clause  of  it,  is  all  that  is  necessary 
at  the  present  conjuncture,  and  that  the  clouds  will  be 
immediately  lifted  from  the  business  and  financial  hori* 
f.ou,  and  the  sun  of  prosperity  again  beam  ^pon  every 
portion  of  our  land. 

I  was  never  the  friend  of  the  so-called  Sherman  act. 
I  voted  against  it,  spoke  against  it,  denounced  it  as  a 
makeshift,  and  declared  it  to  be  the  worst  measure  for 
silver  and  for  bimetallism  that  could  be  invented  and 
placed  upon  the  statute  book.  I  am  in  no  sense  re- 
sponsible for  its  enactment.  To-day  its  malign  and 
distorted  features  look  out  upon  a  land  staggering  and 
reeling  upon  the  verge  of  bankruptcy.    Its  putative 


184  BILVEB  AND  GOLD. 

fathers  have  bastardized  it,  and  are  falling  over  each 
other  now  in  a  vigorous  attempt  to  prove  that  they 
never  favored  it,  and  are  not  responsible  for  its  exist- 
ence. 

In  the  report  of  the  Herschell  committee,  appointed 
by  the  British  House  of  Commons  to  investigate  the 
question  of  mintage  in  India,  the  principal  reason  given 
for  stopping  the  coinage  of  silver  by  private  persons  in 
the  Indian  mints  is  that  the  Sherman  act  might  at  any 
time  precipitate  upon  the  world  a  mass  of  silver  that 
would  probably  cause  a  decline  of  its  value  to  such  an 
extent  as  to  make  free  coinage  in  India  absolutely 
ruinous.  So  this  measure,  introduced  here  ostensibly 
in  the  interest  of  silver,  has  come  home  to  roost  like  a 
young  chicken  as  a  curse  to  silver.  That  act  to-day  is 
like  a  houseless  and  homeless  legislative  dog.  There 
is  no  one  to  give  it.even  a  bone,  and  it  can  not  find  a 
kennel  in  which  to  hide  its  dishonored  head. 

If  the  issue  presented  now  to  the  congress  of  the 
United  States  and  the  American  people  was  simply  the 
repeal  of  the  Sherman  act,  I  take  it  there  would  be  very 
little  debate  and  singular  unanimity  in  our  action  ;  but 
the  issue  has  gone  beyond  the  repeal  of  the  Sherman 
act.  It  is  no  longer  a  question  of  eliminating  that 
statute,  but  it  has  grown  into  a  question  so  grave  and 
momentous  that  the  congress  of  the  United  States 
roust  of  necessity  earnestly  consider  it  before  going 
any  further  in  the  direction  which  has  been  indicated 
to  us. 

The  question  now  before  congress  and  the  American 
people  is  one  of  bimetallism.  Every  intelligent  man 
knows  it.  There  is  no  citizen  of  the  United  States  to- 
day, who  has  given  any  attention  to  public  affairs*  who 


SBNATOB  GBOBGE  O.  YBST.  126 

ttatf  read  the  message  of  the  President  of  the  United 
States ;  who  has  seen  the  utterances  of  those  who  en- 
joy his  especial  confidence,  who  does  not  know  that  we 
stand  now  face  to  face  with  the  great  question  of  bimet^ 
allisin  or  a  single  gold  standard. 

The  time  for  makeshifts  and  evasions  and  subter- 
fuges has  passed..  No  man  in  this  country  is  so  igno- 
rant that  he  does  not  know  that  under  the  circumstances 
and  with  the  declarations  made  by  its  advocates,  the 
unconditional  repeal  of  the  Sherman  act  stamps  forever 
upon  our  financial  policy  the  single  gold  standard. 
Not  one  silver  dollur  will  ever  be  coined  in  this  country 
again  if  we  permit  the  purchasing  clause  of  the  Sher- 
man act  to  be  repealed  without  a  guarantee  as  solemn 
as  the  great  necessities  of  the  people,  that  silver  shall 
continue  to  exist  in  the  United  States  as  a  money 
metal. 

I  have  been  known  as  a  steadfast  and  unflinching 
friend  of  the  president.  I  defended  him  when  assailed 
in  the  canvass  for  nomination  ;  I  defended  him  in  the 
campaign,  and  in  every  speech  I  made  to  the  people  of 
Missouri  I  declared  that  Mr.  Cleveland,  like  myself, 
was  a  bimetallist,  and  that  we  only  differed  in  regard 
to  the  ratio  at  which  the  coinage  of  silver  should  be 
had.  I  had  the  right  to  make  that  statement,  because 
he  had  accepted  the  nomination  upon  a  platform  that 
pledged  the  Democratic  party  to  bimetallism.  It  was 
as  well  known  that  the  Democratic  party  stood  upon 
the  doctrine  of  bimetallism  as  that  it  met  in  Chicago 
and  nominated  Grover  Cleveland  for  president  of  the 
United  States. 

I  do  not  undertake  to  say  now  that  the  president 
b  opposed  to  bimetallism.    I  do  not  undertake  to  sa^ 


126  SILVER  AND  GOLD. 

that  he  would  not  give  his  executive  sanction  to  a 
measure  that  coined  silver  at  the  commercial  ratio  with 
gold,  but  I  do  undertake  to  say  that  his  message  is  most 
significant  from  what  it  £ftils  to  say.  I  undertake  to 
say  now,  with  the  greatest  respect  for  him  and  with 
not  the  slightest  *doubt  as  to  the  honesty  of  his  inten- 
tions, when  he  fails  in  this  great  state  paper  at  such  a 
contingency  to  say  one  word  in  regard  to  bimetallism, 
it  certainly  means  that  he  considers  the  free  coinage  of 
silver  at  any  ratio  so  impracticable  that  it  does  not  need 
executive  notice.  If  a  bimetallist  at  all,  it  would  be  an 
insult  to  the  intelligence  of  the  president  to  believe  that 
under  the  circumstances  he  would  have  deliberately 
sent  this  paper  to  us  and  to  the  world  without  having 
indicated  in  some  way  that  he  was  willing  to  bring 
about  and  maintain  bimetallism  on  some  terms  in  the 
United  States. 

When  during  the  last  congress  it  was  proposed  to 
pass  a  free  coinage  bill  at  the  ratio  of  16  to  1,  although  I 
had  repeatedly  voted  for  such  a  bill,  although  I  had  in- 
troduced a  bill  which  passed  the  senate  and  went  to 
the  house  of  representatives  identical  in  its  provisions 
with  that  which  was  offered  here,  I  moved  to  postpone 
the  consideration  of  that  measure  until  after  the  No- 
vember  election  because  our  party  had  met  and  declared 
its  platform  and  nominated  its  candidate,  and  I  believed 
that  in  simple  justice  and  in  the  spirit  of  fair  play,  Mr. 
Cleveland  should  be  permitted  to  go  before  the  Ameri- 
can people  upon  our  platform  and  that  the  silver  ques- 
tion, as  it  had  been  disposed  of  in  that  platform,  should 
become  an  issue  and  be  submitted  to  the  American  peo- 
ple ;  but  I  did  not  mean  to  indicate  for  an  instant  that 
in  voting  for  the  postponement  of  the  question  at  thafc 


DA.TID  B.    HILL, 


8BNAT0B  GEORGE  G.  VEST.  129 

time  I  gave  up  the  great  doctrine  of  bimetallism  as  es- 
tablished by  the  traditions  and  policies  of  our  people 
and  enshrined  in  their  hearts  to^ay.  In  that  sessior. 
of  congress  I  took  occasion  in  discussing  the  financisi 
question  to  make  the  declaration,  by  which  I  stand 
now: 

'*  I  have  supported  the  free  coinage  of  silver  princi- 
pally upon  the  ground  that  I  oppose  all  class  legislation. 
I  have  never  been  (perhaps  it  has  been  my  obtuseness) 
able  to  see  the  justice  of  permitting  a  man  who  owns  a 
gold  mine  to  go  to  the  mints,  the  common  property  of 
the  people,  and  coin  his  gold  without  expense,  and  deny 
the  same  privilege  to  the  owner  of  a  silver  mine,  who 
is  au  equal  owner  in  the  mints  of  this  country,  and  who 
possesses  a  product  which  under  the  constitution  is  a 
money  metal.  If  it  is  proposed  now,  and  we  are  rapidly 
nearing  that  issue,  to  strike  down  silver  as  a  money 
metal  in  this  country,  I  distinctly  state  that  I  shall  be 
found  in  favor  of  bimetallism  as  established  by  the  con- 
stitution of  the  United  States  and  by  the  traditions  of 
the  American  people." 

I  am  anxious  to  avoid  the  slightest  misstatement  or 
to  make  any  unjust  criticism  upon  the  present  adminis- 
tration of  my  own  party,  but  I  do  not  feel  myself  at 
liberty,  in  view  of  the  responsibilities  imposed  upon  me, 
to  refrain  from  stating  emphatically  my  conviction  that 
we  must  determine  now  the  question  of  bimetallism  or 
the  gold  standard. 

In  addition  to  what  I  have  said  in  regard  to  his 
message,  what  intelligent  man  believes  that,  without 
the  knowledge  that  the  sentiments  expressed  therein 
were  in  consonance  with  the  opinions  of  the  chief  exe- 
cutive, the  head  of  the  great  banking  department  of 
this  government  would  have  come  ou  t  in  a  magazine 


180  SILVER  AND  X^OLD. 

article,  which  I  have  before  me,  declaring  for  the  single 
gold  standard  and  announcing  to  the  American  people 
that  silver  was  doomed  and  must  cease  to  be  a  money 
metal  in  the  United  States? 

I  have  the  right  as  a  public  man  and  as  a  private 
citizen  to  assume  that  when  an  officer  of  this  govern^* 
ment,  in  control  of  its  banks,  near  to  the  secretary  of 
the  treasury  and  in  daily  intercourse  with  him,  ap- 
pointed by  the  president  of  the  United  States  and  con- 
firmed by  the  senate  when  the  president  himself  knew 
that  there  was  a  difference  of  opinion  in  regard  to  that 
appointment,  and  that  the  Democratic  party  by  a  large 
majority  and  many  Republicans  deferred  to  his  opinion 
in  voting  for  that  confirmation — I  say  that  I  have  a 
right  to  assume  that  with  these  relations  the  comptroller 
of  the  currency  does  not  antagonize  the  opinion  of  the 
president  upon  this  great  issue. 

I  do  not  conceal  from  myself  the  desperate  char- 
acter of  the  contest  which  has  come  upon  us.  I  recog- 
nize the  fact  that  the  money  power  of  the  civilized 
world  through  its  authorized  exponents  is  against  silver 
to-day  as  a  standard  metal.  I  do  not  attempt  to  delude 
myself  into  the  opinion  or  impression  that  we  are  not 
entering  upon  a  doubtful  conflict.  It  has  been  the  his- 
tory of  finance  in  all  ages  of  the  world  that  centraliza- 
tion and  consolidation  managed  in  one  way  or  another 
to  impress  itself  upon  the  destinies  of  all  peoples.  It 
is  known  as  well  as  the  names  of  the  different  countries 
upon  the  map  of  the  globe  that  a  few  men,  not  exceed- 
ing perhaps  one  dozen,  can  to-day  influence  the  finances 
of  the  whole  world  and  can  make  and  unmake  even 
kings  and  emperors,  obliterate  frontierSi  and  change  the 
destinies  of  the  human  race. 


BIENBTOB   OBOBOB  6.  VEST.  181 

Eilglana  in  1815  overthrew  Napoleon  I.,  and  to  do 
this  the  younger  Pitt  plunged  the  English  people  into  a 
vortex,  as  was  supposed  then  by  intelligent  men,  of 
absolute  bankruptcy.  Scarcely  had  the  battle  smoke 
cleared  from  the  field  of  Waterloo  and  the  shattered 
columns  of  the  old  ^uard  had  been  broken  in  flight, 
when  England,  in  1816,  went  to  the  gold  standard. 
An  enormous  debt  had  been  created.  To-day  the  con- 
sols of  Great  Britain  govern  the  empire ;  all  invest- 
ment, all  trust  money,  all  the  financial  interests  of  the 
country  are  represented  by  the  consols,  and  the  blood 
of  the  body  politic  ebbs  and  flows  with  the  rise  and  fall 
of  its  consolidated  debt. 

England  went  to  the  gold  basis  because  deeply  in- 
debted to  the  Rothschilds  and  others  for  money  which 
had  been  employed  against  the  great  emperor.  In 
order  to  float  that  debt,  in  order  to  consolidate  it,  in 
order  to  keep  iif  hand  the  finances  of  that  country,  a 
great  commercial  people,  dependent  not  upon  agricul- 
ture, but  upon  trade  and  commerce  and  finance,  it  be- 
came absolutely  necessary  that  they  should  go  to  the 
gold  standard  in  order  to  please  the  money-changers  of 
the  world. 

The  policy  of  the  English  Empire,  aggressive  and 
distinct  in  aU  its  features,  can  be  easily  understood  by 
the  ordinary  student  of  history,  not  to  say  of  finance. 
It  is  the  policy  of  Great  Britain  to  centralize.  Her 
vast  colonial  system  consists  of  tributaries  that  pour 
their  wealth  into  the  great  lake  of  England.  The  home 
country  is  first  to  be  considered,  and  the  colonies  held 
by  British  arms  are  made  tributary  to  the  commercial 
and  financial  interests  of  the  English  people  proper  at 
home. 


182  SILVER  AND  GOLD. 

This  is  the  policy  of  the  English  government.  All  its 
colonies  are  simply  provinces,  and  the  great  salient  and 
objective  point  of  all  its  legislation  and  policy  is  to  con- 
centrate wealth  and  power  in  the  home  government  and 
with  the  home  people.  Is  it  any  wonder,  then,  that 
England  is  to  day  and  has  been  since  1816  for  the  gold 
standard  ?  It  enables  her  to  command  the  commerce 
of  the  world  because  gold  is  the  money  of  commerce 
Mr.  Jefferson  declared  as  the  result  of  his  wonderful 
researches  that  the  money  of  the  American  people 
should  be  gold  and  silver.  Gold,  he  said,  is  the  money 
of  commerce,  foreign  commerce,  intercourse  between 
nations  and  bankers. 

The  fact  that  a  large  value  can  be  put  in  a  small 
compass,  the  facility  of  transportation,  the  ease  of  stor- 
age, all  give  to  gold  attributes  which  no  other  metal  can 
possibly  have ;  but  is  it  to  be  said  that  silver  has  not  its 
uses?  Silver  has  always  been  the  money  of  the  people, 
not  of  the  bankers  and  capitalists  and  usurers,  but  of 
the  common,  plain  people,  as  Lincoln  termed  them, 
who,  in  their  domestic  barter  and  everyday  business  at 
home,  do  not  need  this  red  despot  of  gold,  but  silver, 
with  which  they  and  their  fathers  have  always  been 
familiar. 

We  are  told,  that  overproduction  is  the  cause 
of  the  fall  of  silver  in  price,  that  it  has  not  been 
legislation,  but  that  natural  causes,  the  law  of  supply 
and  demand  have  brought  silver  to  its  present  value  in 
the  markets  of  the  world. 

Let  me  ask  my  friends,  the  monometallists,  one  ques- 
tion. Was  there  an  overproduction  of  silver  in  1873, 
when  it  was  demonetized  in  this  country  by  striking  the 
silver  dollar  from  the  coinage  of  .the  United  States? 


SENATOR  GEORGE  G.  VEST.  188 

Had  there  been  overcoinage  of  silver'so  as  to  glut  the 
markets  aud  bring  down  its  price  undec  natural  rules? 
We  have  the  authority  of  the  distinguished  senator  from 
Ohio  [Mr.  Sherman],  of  the  secretary  of  the  treasury 
to-day,  Mr.  Carlisle,  aud  of  the  reports  of  the  treasury 
department  that  but  eight  million  of  the  standard  dol- 
lars had  been  coined  in  the  United  States  from  1792  to 
1873 :  we  put  but  ^8,000,000  in  circulation,  and  not  so 
many,  because  the  reports  of  the  director  of  the  mint 
from  year  to  year  show  that  the  coin  of  the  couutiy 
goes  into  industrial  pursuits  and  is  used  by  the  jewelers 
and  artificers  in  precious  metals,  and  a  portion  of  thut 
$8,000,000  must  have  been  so  used.  Yet  with  this  in- 
considerable amount  coined  by  this  government  from 
1792  to  1878,  it  was  deemed  necessary  in  the  latter 
year  to  strike  out  the  silver  dollar  from  the  coinage  of 
the  United  States. 

It  makes  no  difference  who  demonetized  silver  in 
1873.  We  have  had  many  explanations.  The  most 
plausible  was  that  the  standard  dollar  as  it  then  ex- 
isted was  inconvenient.  No  other  reason  which  has 
ever  been  given,  in  my  opinion,  afforded  one  shadow  of 
excuse  for  that  action. 

My  point  made  here  now  to  be  answered  is,  if  over- 
production and  overcoinage  of  silver  has  caused  its 
present  depreciated  value,  how  did  the  coinage  of 
8,000,000  standard  dollars  in  1873  justify  or  cause  the 
action  of  congress  at  that  time  ? 

The  two  precious  metals  have  fluctuated,  as  they 
necessarily  must,  in  all  ages  of  the  world ;  first  silver 
being  produced  in  excess  of  gold  and  then  gold  in  ex* 
cess  of  silver.  How  is  it  possible  that  it  could  be 
otherwise  ?    What  intelligent  man  for  a  moment  could 


184  BlLVBlt  AKt>  OOLt>. 

advance  the  idea  that  two  metals,  dependent  upon  the 
quantity  discovered  in  the  bowels  of  the  earth,  ahould 
be  mathematically  or  logically  equal  at  all  times  in 
quantity  or  ratio  ? 

After  Cortez  had  conquered  Mexico  and  had  sent 
back  to  Spain  the  gold  which  he  had  taken  from 
Montezuma  and  his  successors,  and  from  the  provinces 
of  Mexico,  even  robbing  their  temple  in  order  to  satisfy 
Spanish  greed,  all  this  treasure  which  we  are  accus- 
tomed to  look  upon  as  fabulous,  but  which  in  reality 
amounted  to  about  $80,000,000  a  year,  failed  to  affect 
the  markets  of  the  precious  metals  in  the  Old  World. 
It  was  not  until  a  peasant  who  was  bearding  a  flock  of 
llamas  at  Potosi,  in  upper  Peru,  happened  to  discover  a 
silver  mine  of  fabulous  richness  that  the  price  of  the 
two  metals  was  seriously  disturbed  in  the  markets  of 
Europe.  For  many  years,  as  shown  by  this  table,  gold 
was  produced  in  the  most  insignificant  amounts,  while 
silver  was  produced  twenty,  thirty,  and  thirty-two 
times  in  excess  annually  of  the  production  of  gold  ;  yet 
the  price  of  silver  was  not  affected  and  it  maintained 
its  place  as  a  money  metal. 

In  order  to  show  that  my  statement  is  absolutely  cor- 
rect, I  have  taken  the  trouble  to  make  a  calculation, 
based  upon  the  Soetbeer  table.  From  1838  to  1840 
there  was  produced  thirty-two  times  as  much  silver  as 
gold  in  the  world  ;  from  1841  to  1850,  fifteen  times  as 
much;  from  1851  to  1855,  five  times  as  much: 
from  1855  to  1860,  four  times  as  much;  from 
1861  to  1865,  six  times  as  much ;  from  1866  to  1871, 
three  times  as  much ;  from  1871  to  1875,  twelve  tunes 
as  much;  from  1876  to  1880,  sixteen  times  as  much  ; 
from  1881  to  1885,  twenty  times  as  much ;  and  from 


SfitTATOE  6EOBOE  G.  VSBT.  1&6 

1886  to  1892,  from  eighteen  to  twenty-five  times  as 
much. 

Now,  I  assert  that  these  tables  show,  if  they  are 
worth  the  paper  upon  which  they  are  printed,  that  the 
relative  proportion  of  silver  to  gold  has  never  been  as 
great  as  it  was  in  the  eras  I  have  named  here,  from 
1888  to  1844  and  from  1844  to  1850. 

We  hear  upon  every  side  the  assertion  that  the  pro- 
duction of  silver  which  amounted  to  974,000,000,  ac- 
cording to  the  report  of  the  director  of  the  mint,  in  1892 
in  the  United  States  has  caused  its  decline.  There  were 
f33,000,000  of  gold  produced  in  this  country  for  1892, 
the  production  of  silver  being  about  2  to  1,  and  it  is 
said  that  this  accounts  for  the  attack  upon  silver  as  a 
money  metal  and  the  attempt  now  to  destroy  it  through- 
out the  world.  From  1882  to  1840,  thirty -two  times  as 
much  of  silver  was  produced  as  of  gold.  If  it  be  a 
logical  proposition  that  the  overproduction  now  has 
destroyed  silver,  why  was  it  then  not  blotted  out  from 
the  face  of  the  earth  as  a  medium  of  exchange  and  of 
standard  value  ? 

I  call  attention  to  the  price  of  silver,  which  it  is  said 
is  affected  by  overproduction.  From  1888  to  1840, 
when  there  was  thirty-two  times  as  much  silver  as  gold 
produced  in  the  world,  silver  was  worth  in  this  country 
•1.29  and  1(1.82  an  ounce.  From  1841  to  1850,  when 
there  was  fifteen  times  as  much  silver  as  gold  produced, 
silver  was  still  worth  91.29  to  91.31  an  ounce.  I  quote 
from  the  report  of  the  director  of  the  mint.  From 
1851  to  1855,  when  there  were  five  times  as  much  silver 
produced  as  gold,  silver  sold  in  the  United  States  from 
91.82  to  91.85  an  ounce,  being  an  increase  of  from  8  to 
r  tents  on  the  ounce.    From  1855  to  1860,  when  there 


1S6  SILVER  AND  GOLD. 

were  four  times  as  much  produced,  it  sold  from  f  1.84  to 
$1.86  an  ounce. 

The  decrease  in  the  production  of  silver,  as  it  would 
appear  from  this  table,  in  1850-'51,  was  not  really  a  de- 
crease in  the  mining  production,  but  there  was  a  vast 
increase  from  1850  to  1855  in  the  production  of  gold  on 
account  of  its  discovery  in  California  and  Australia  and 
the  reworking  of  the  mines  in  Siberia.  It  is  absolutely 
impossible  under  the  rules  of  logic,  if  our  friends  be 
correct  that  overproduction  is  the  cause  of  the  present 
condition  of  silver,  that  this  enormous  overproduction 
should  have  existed  in  the  eras  I  have  named  and  yet 
not  have  brought  about  the  same  result. 

I  have  said,  that  it  was  impossible  that  these  metals 
ohould  remain  logically  and  mathematically  at  the  same 
ratio.  Many  circumstances  and  facts  affect  this  ratio. 
Who  will  undertake  to  say  now,  unless  he  has  the  gift 
of  prophecy,  when  the  gold  mines  will  cease  to  produce  ? 
There  have  been  times  in  history — and  we  have  them 
upon  such  proof  that  no  doubt  can  exist — when  the 
production  of  gold  absolutely  ceased,  at  other  times 
when  the  production  of  silver  absolutely  ceased.  Is  it 
wise  statesmanship  for  the  representatives  of  the  people 
to  put  themselves  absolutely  in  the  power  of  any  one 
metal  uncertain  and  precarious  in  the  supply?  Sup- 
pose to-morrow  the  gold  production  of  this  country 
should  fall  off  one-half  and  of  the  world  one-third,  what 
would  be  the  result  ?  The  United  States,  if  it  had 
eliminated  silver,  would  be  found  absolutely  at  the 
commercial  mercy  of  the  vast  hoards  of  gold  which  for 
war  purposes  have  been  piled  up  in  the  treasuries  of 
continental  nations  and  of  England.  Should  we  not 
tatber  r^ly  upon  both  metals  in  whose  production  na« 


SBNATOB  GEOBGE  G.  VysM.  187 

tnre  preserves  ao  equilibrium?  I  can  produce  authority 
much  higher  than  mine  in  regard  to  the  precarious  na- 
ture of  these  metals.  The  present  Secretaiy  of  the 
Treasury  said  in  1878,  when  discussing  the  question 
upon  which  I  have  the  honor  now  to  address  the  sen* 
ate: 

*^  I  know  that  the  world's  stock  of  precious  metals  is 
none  too  large,  and  I  see  no  reason  to  apprehend  that  it 
will  ever  become  so. 

'*  Mankind  will  be  fortunate  indeed  if  the  annual  pro- 
d  action  of  gold  and  silver  coin  shall  keep  pace  with  the 
annual  increase  of  population,  commerce,  and  industry. 
According  to  my  view  of  the  subject,  the  conspiracy 
which  seems  to  have  been  formed  here  and  in  Europe  to 
destroy  by  legislation  and  otherwise  from  three-sevenths 
to  one-half  of  the  metallic  money  of  the  world  is  the 
most  gigantic  crime  of  this  or  any  other  age.  The  con- 
summation of  such  a  scheme  would  ultimately  entail 
more  misery  upon  the  human  race  than  all  the  wars» 
pestilence,  and  famine  that  ever  occurred  in  the  history 
of  the  world.  The  absolute  and  instantaneous  destruc- 
tion of  half  the  entire  movable  property  of  the  world, 
including  houses,  ships,  railroads,  and  all  other  appli- 
ances for  carrying  on  commerce,  while  it  would  be  felt 
more  sensibly  at  the  moment,  would  not  produce  any- 
thing like  the  prolonged  distress  and  disorganization  of 
society  that  must  inevitably  result  from  the  permanent 
annihilation  of  one-half  of  the  metallic  money  of  the 
world." 

Why,  for  sane  men  in  a  country  that  stands  upon  the 
bed  rock  of  independence  to  put  themselves  in  the  hands 
of  the  monarchies  of  Europe,  in  the  hands  of  the  gold 
manipulators,  who  at  any  time  can  fix  the  price  of  the 
property  of  the  world  if  they  see  proper  to  do  so,  is  not 
only  a  crime,  as  the  Secretary  of  the  Treasury  has  do 


Ite  SILVER  AKD  GOLt), 

clared  it,  but  a  crime  so  monstrous  that  no  punishment 
could  be  adequately  inflicted  for  its  commission. 
Thomas  Jefferson  dreamed  of  an  ideal  republic,  and 
what  was  it  ?    He  said : 

^  Let  us  found  a  government  where  there  shall  be  no 
extremely  rich  men  and  no  abjectly  poor  ones.  Let  us 
found  a  government  upon  the  intelligence  of  the  people 
and  the  equitable  distribution  of  property.  Let  us 
make  laws  where  there  shall  be  no  governmental  part- 
nership with  favored  classe3.  Let  us  protect  all  in 
life,  liberty  and  property,  and  then  say  to  every  Ameri- 
can citizen,  with  the  gifts  that  God  has  given  you,  your 
brain  and  brawn  and  energy,  work  out  your  own  for- 
tunes under  a  just  government  and  equal  laws.'' 

If  Jefferson  could  to-day  revisit  the  earth,  or  if  the 
dead  can  take  notice  of  the  affairs  of  the  living,  what 
would  he  think  of  this  country  which  he  helped  to  es- 
tablish and  whose  independence  he  put  in  letters  of  liv- 
ing fire  upon  the  pages  of  history,  if  he  should  find 
sixty-seven  million  of  freemen,  with  a  continent  for  an 
inheritance,  with  the  rain  and  sunshine  and  dew,  the 
mountains  and  rivers,  with  almost  illimitable  resources, 
in  the  hands  financially  of  a  dozen  men  in  New  York, 
who  miike  and  unmake,  and  who  can  in  an  hour  so 
hoard  the  currency  of  the  whole  country  as  to  produce 
a  money  famine,  and  then  exact  from  the  people  their 
own  terms? 

I  desire  to  enter  into  no  philosophical  nor  sentimen- 
tal essay.  I  am  an  American,  and  I  trust  practical  in 
the  consideration  of  every  question ;  but  the  genius  of 
our  institutions  and  of  our  people,  the  fundamental 
doctrines  upon  which  we  exist  as  a  nation,  the  instinc- 
tive feeling  of  every  true  American,  no  matter  of  what 


political  belief  he  may  be,  must  be  naturally  against  the 
policy  that  centralizes  and  consolidates  the  fearful 
power  of  money  in  the  hands  of  the  few  against  the 
many.  For  myself,  I  would  give  up  every  doctrine 
of  my  life  and  eveiy  feeling  of  my  nature  if  I  did  not 
stand  now  to  the  last  against  legislation  that  would 
further  extend  this  centralization. 

But  we  are  told  that  silver  must  be  demonetized 
because  it  fluctuates  in  value ;;  that  gold  is  stable  and 
silver  is  the  changing  child  of  caprice  and  circum- 
stance. John  Monteath  Douglas,  a  business  man  in 
the  city  of  London,  who  has  unquestionably  <«tudied 
this  question,  says : 

**  Silver  has  really  fluctuated  much  less  than  gold. 
Till  December,  1888,  and  on  to  end  of  1891,  it  con- 
tinued to  rise  in  value  as  compared  with  the  average  of 
commodities,  just  as  gold  did,  but  much  less,  and  keep- 
ing a  much  closer  and  more  uniform  relation  to  the 
prices  of  commodities  than  gold  did.  See  list  of  prices 
next  page.  The  gold  price  of  silver  was  4ower'  in 
1888  and  1889  than  it  had  been  at  any  time  within 
memory,  but  the  gold  prices  of  commodities  were  on 
the  average  lower  still,  as  explained  below  in  detail,  so 
that  silver  had  maintained  its  price,  or  rather  risen  in 
comparison  with  the  average  of  commodities.'' 

I  can  not  resist  saying  parenthetically  that  the  fal- 
lacy and  the  delusion  of  the  argument  made  by  tlie 
monometallists  in  regard  to  the  fall  of  silver  is  based 
upon  the  idea,  not  of  its  purchase  of  commodities,  but 
the  value  of  silver  in  gold.  All  the  statisticians  and 
financiers  of  the  world  whose  declarations  are  wortii 
anything  put  the  criterion  as  to  the  value  of  the  pre- 
cious metals  upon  their  ability  to  purchase  the  neces- 


140  SILYBB  AND  GOLD. 

Baries  of  life.  Any  other  criterion  is  false.  When  yoa 
can  take  so  much  silver  and  buy  so  much  meat  and  so 
much  bread,  although  gold  may  go  up  and  silver  stUl 
continues  to  buy  the  same  quantity  of  meat  and  bread, 
it  has  not  fallen.  Silver,  as  this  writer  says,  has  not 
fluctuated  under  this  great  criterion  of  its  power  to 
purchase  the  necessaries  of  life,  and  the  tables  of  the 
most  eminent  statisticians  show  it. 

As  a  matter  of  course,  it  was  absolutely  impossible 
that  these  commodities  and  silver  should  be  mathemat- 
ically  equal.    That  would  be  unnatural  and  impossible, 

but  I  make  the  statement  here  now  and  invite  mv 

• 

friends  the  monometallists  to  disprove  it,  that  the  pur- 
chasing quality  of  silver  has  remained  more  stable  than 
that  of  gold.  Gold  has  fluctuated.  Gold  has  gone  up 
and  gold  has  gone  down,  but  silver  has  remained  more 
nearly  equal  in  its  purchasing  power  from  age  to  age, 
notwithstanding  all  the  mutations  of  mining  and  of 
commerce,  than  has  the  gold  metal. 

As  a  matter  of  course,  articles  of  necessity  have 
fluctuated.  It  goes  without  saying  that  the  failure  of 
a  crop  and  other  vicissitudes,  the  law  of  supply  and 
demand,  which  is  invoked  so  often,  will  cause  fluctua- 
tions in  these  articles.  It  would  be  just  as  absurd  to 
say  that  they  always  remain  the  same  at  any  standard 
as  to  say  that  gold  and  silver  could  always  remain  ex- 
actly equal.  But  the  fact  still  remains  that  in  the 
eras  which  are  used  by  these  statisticians  the  fluctua- 
tions in  silver  have  not  been  so  sudden  or  violent- as 
the  fluctuations  in  gold. 

It  is  true  that  in  the  long  period  from  1803  to  1878 
both  silver  and*  gold  fluctuated  in  value,  and  it  is  true 
that  during  that  period  gold  went  to  a  premium  of  1| 


SENATOR  OEOBGB  G.  VEST.  141 

per  cent,  in  France,  and  virtually  went  out  of  circula- 
tion,  as  is  always  the  case ;  but  it  is  also  true,  as  shown 
by  Chevalier,  that  with  the  exception  of  this  era, 
which  lasted  but  a  few  years,  silver  was  the  ruling 
metal  in  France.  Silver  was  the  standard  of  value 
really,  although  gold  was  also  used.  When  the  great 
Australian  and  Calif  or  nian  discoveries  were  made,  gold 
poured  into  France  and  into  Europe  at  such  a  rate 
that  this  whole  book,  Chevalier  on  Gold,  is  devoted  to 
the  discussion  of  the  question  how  to  make  gold  keep 
its  parity  with  silver.  The  dread  in  Europe  then  was 
that  gold  would  cease  to  be  a  money  metal  and  that  all 
the  continental  people  would  be  relegated  to  the  use 
of  silver  alone  for  all  the  purposes  of  exchange  and  as 
a  standard. 

Even  if  the  monometallists  could  reach  their  ely- 
sium  financially  of  a  gold  standard  there  would  still  be 
fluctuation  in  prices  of  commodities  in  this  and  every 
other  country,  and,  as  a  matter  of  course,  as  gold  in- 
creased in  value,  or,  to  speak  more  properly,  as  gold 
became  scarcer  prices  would  go  down.  Any  discussion 
is  imperfect,  incorrect,  and  unsatisfactory  that  does  not 
admit  upon  both  sides  what  is  known  to  the  whole 
world,  and  must  be  always  known  to  every  intelligent 
human  being,  that  if  you  increase  the  volume  of  money 
you  put  up  prices,  and  if  you  decrease  the  volume  of 
money  you  put  them  down. 

I  have  seen  the  day  in  the  vicissitudes  of  my  life, 
when  $20  in  paper  would  not  buy  a  loaf  of  bread,  and 
a  five-dollar  gold  piece  would  buy  a  house  and  lot.  I 
want  to  read  now,  the  statement  of  the  rule,  which  is 
inflexible,  as  to  the  precious  metals.  I  read  from  Chev* 
alier,  who  is  quoted  approvingly  as  a  great  authority : 


142  BILVEB  AND  GOLD. 

**  The  effects  of  a  rise  or  fall  in  the  precious  metals 
are  displayed  in  a  manner  peculiar  to  themselves,  ow- 
ing to  the  attribute  of  money  with  which  they  are  in- 
vested. When  it  is  said  that  a  commodity  falls  in 
value,  it  means  that  we  must  give  a  larger  proportion 
of  it  than  previously  to  procure  in  exchange  the  same 
quantity  of  any  other  article  of  commerce.  The  price 
of  that  article,  whether  it  be  iron,  lead,  corn,  wine,  or 
any  other  product,  excepting  the  metal  or  metals  of 
which  money  is  made,  falls  accordingly ;  for  the  price 
of  a  thing  is  its  value  specially  compared  with  those 
metals,  or,  to  express  differently  the  same  idea,  it  is  the 
number  of  monetary  units  which  it  is  necessary  to  give 
in  exchange  for  a  certain  weight  or  volume  of  another 
commodity.  A  diminution  in  the  value  of  the  metal 
from  which  money  is  essentially  coined  is  shown  dif!'er- 
ently  in  this  respect,  that  its  price  remains  the  same ; 
but  then  the  price  of  all  other  commodities,  without 
exception,  rises  if  its  value  compared  with  itself  has 
fallen,  and  falls  if  it  has  risen. 

^^  I  say  that  its  price  as  measured  by  itself  remains 
the  same,  since  for  this  metal,  specially  and  exclusively, 
the  price  is  its  value  compared  with  itself.  If,  for  ex- 
ample, the  value  of  silver  falls  one-half  as  the  mon- 
etary unit,  the  franc  consists  in  France  of  four  grains 
and  a  half  of  silver,  a  kilogram  in  weight  of  fine  metal 
will  still  be  worth  222  francs  22  cents,  because  one  kil- 
ogram contains  four  grams  and  a  half,  222  times  and  a 
small  fraction ;  but  in  this  case  the  price  of  lead,  iron, 
wheat,  wine,  and  all  other  commodities  will  be  doubled, 
because,  to  obtain  the  same  quantity  of  these  articles, 
it  is  necessary  to  give  double  the  quantity  of  silver." 

There  is  the  inflexible  monetary  rule.  There  is  no 
sort  of  rhetoric  or  declamation  that  can  do  away  with 
it.  We  had  just  as  well  confront  this  proposition  now, 
and  there  is  no  escape  from  it.  If  for  any  cause  (and 
I  will  leave  the  causes  now  to  inject  this  remark)  we 


8ENATOB  GBOROE  G.  VEST.         148 

strike  down  one-half  the  metallic  basis  of  value  in  the 
world  we  double  the  burdens  that  are  resting  upon  all 
who  owe  money ;  and  we  beyond  computation  almost, 
for  no  man  can  foresee  the  future,  put  down  the  price 
of  commodities. 

Mr.  Horace  White  says  in  an  article  which  I  have 
before  me  that  he  hopes  the  day  will  come,  and  he 
wants  to  see  it,  when  everything  will  be  cheapened  be- 
cause it  is  to  the  interest  of  everybody  that  everything 
should  be  cheap.  He  disagrees  with  some  of  his  own 
party,  for  it  has  been  but  a  few  years  ago,  in  1890, 1 
believe,  when  we  were  told  that  the  words  ^^  cheap " 
and  *' nasty''  went  together,  and  that  cheap  clothes 
made  a  cheap  man.  Now  we  are  told  by  Mr.  White 
that  he  wants  to  see  the  era  come  when  commodities 
will  be  reduced  in  price,  when  the  wheat-growers  of 
the  West  instead  of  getting  for  their  wheat  delivered 
at  a  country  depot  85  and  40  cents  a  bushel  will  re- 
ceive 15  and  20  cents,  when  the  mortgaged  indebted- 
ness  of  this  country  will  be  doubled,  and  the  man  who 
can  to-day  pay  off  his  mortgage  with  a  thousand 
bushels  of  wheat  must  add  the  labor,  and  the  priva- 
tion, and  the  mental  anxiety  necessary  to  raise  2,000 
bnshels  in  order  to  discharge  the  same  indebtedness* 

Now  let  me  read  another  extract  from  this  paper. 
In  regard  to  the  effect  of  the  increase  in  the  value  of 
gold  upon  prices,  this  gentleman,  (Mr.  Giffen),  who  is 
now  an  extreme  monometallist,  makes  the  following 
statement,  as  given  in  the  essay  from  which  I  am  read- 
ing: 

**  He  then  deals  with  the  effects  of  this  appreciation 
of  gold  on  the  distribution  of  wealth,  and  says:     *It 


144  dILVBR  AND  GOLD. 

is  obvious  beyond  all  question  that  these  enects  may 
be  important.  The  debtors  pay  more  than  they  would 
otherwise  pay,  and  the  creditors  receive  more.  The 
matter  is  thus  not  unimportant  to  the  two  large  classes 
of  people  who  make  up  the  community.  Appreciation 
is  a  mottt  serious  matter  to  those  who  have  debts  to  pay. 
It  prevents  them  gaining  by  the  development  of  in- 
dustry as  they  would  otherwise  ffain.' 

**  As  to  the  landowners,  he  shows  how  appreciation 
of  gold  and  consequent  fall  of  prices  has  swept  away 
the  surplus  value  of  many  estates,  especially  of  land, 
and  also  estates  of  other  sorts,  and  made  them  insufiS- 
cient  even  to  pay  the  mortgages  on  them ;  also,  he 
illustratcA  the  same  kind  of  effect  on  stocks  of  va- 
rious sorts." 

But  I  isuppose  it  is  not  necessary  to  read  authori- 
ties to  show  that  the  increase  in  the  value  of  gold 
which  would  follow  from  the  elimination  of  silver  as  a 
money  metal  would  increase  the  burdens  of  indebted- 
ness immensely  all  over  the  world,  and  would  put 
down  the  price  of  products,  thereby  taking  away  from 
the  debtor  the  ability  to  pay  with  the  same  amount  of 
property  a  debt  which  he  had  contracted  upon  a  differ- 
ent ratio  and  under  a  different  standard.  Even  the 
Herschell  committee,  in  justifying  the  closing  of  the 
mints  in  India  to  the  private  coinage  of  silver,  makes 
a  statement  to  this  effect,  to  which  I  ask  the  attention 
of  our  monometallic  friends. 

I  am  not  in  the  habit  of  appealing  to  the  prejudices 
of  the  poor  against  the  rich.  I  know  but  one  rule  in 
my  legislative  conduct,  to  protect  all  alike  and  treat 
all  alike,  and  it  is  not  just  to  the  debtor  who  has  con- 
tracted his  indebtedness  under  silver  and  gold  to  strike 
silver  out  of  the  currency  and  take  more  than  one-half 
ii>  excess  c7  his  property  to  pay  a  debt  so  contracted 


or   - 


ARTHUR  P.   GORMAN, 


8ENATOB  6EOK6E  G.  VEST.  147 

No  living  man  can  justify  legislation  like  that.  If 
we  bad  the  power  now  to  put  this  country,  all  obliga- 
tions being  obliterated,  to  the  test  whether  we  should 
have  gold  or  silver,  one  standard  or  the  other,  it  would 
be  a  fair  issue.  But  as  we  are  now,  with  debts  con- 
tracted to  the  amount  of  18,000,000,000  in  the  United 
States,  to  strike  down  the  ability  by  one-half  of  the 
debtor  to  pay  his  obligation  is  not  only  unjust  and 
ruinous,  but  absolutely  wicked. 

Another  argument  is  made  daily  and  hourly  by  the 
metropolitan  journals.  It  is  said  we  can  not  maintain 
a  different  standard  from  Europe.  We  must  not  put 
this  country  in  a  position  of  isolation.  We  must  not, 
to  use  a  much-abused  term,  put  a  wall  around  the 
people  of  the  United  States.  I  am  not  disposed  to  be 
prejudiced  against  England.  The  English  are  a  great 
people.  They  understand  the  chief  end  of  commercial 
life  better  than  any  people  who  have  ever  existed,  even 
than  the  Venetians.  I  am  not  here  to  array  the  people 
of  the  United  States  against  those  of  Great  Britian. 
We  come  from  the  same  lineage,  and  they  simply  exer- 
cise the  right  that  we  exercise — to  take  care  of  them- 
selves. I  can  understand  how  an  Englishman  would 
be  for  the  gold  standard.  The  gold  standard  makes 
England  financially  the  mistress  of  the  world. 

In  1844,  after  they  had  demonetized  silver  in  1816, 
the  British  Parliament  passed  the  bank  act,  in  which 
they  made  it  mandatory  on  the  Bank  of  England  to 
buy  every  ounce  of  gold  that  came  from  any  portion 
of  the  world  for  all  time  to  comev  at  the  fixed  valuation 
of  jE3  17«.  Sd,  an  ounce,  a  fraction  over  i20. 

What  was  the   inevitable   result?     All  the  world 
except  England  was  on  a  silver  or  a  bimetallic  stand- 
9 


148  SILVER  AND  GOLD. 

ard.    Germany  was  on  the  exclusive  silver  standard 
The  Latin  Union  was  on  the  silver  standard.     Everj 
country  of  any  importance  in  the  world  was  champion 
ing  silver ;  and  yet  our  ancestors  deliberately  took  uj 
the  gauge  of  battle  and  said  to  the  whole  world,  *^  You 
shall  have  gold,"  as  my  predecessor  here,  Mr.  Benton 
said,  red  gold,  and  although  their  first  step  was  chal 
lenged  to  the  death,  they  said,  "  Every  ounce  of  gold 
produced  anywhere  in  the  world  shall  be  bought  by 
the  Bank  of  England  at  the  price  we  have  named,'* 
and  that  fixed  the  price  of  gold  in  the  remotest  parts 
of  Asia. 

Every  man  who  had  an  ounce  of  gold  knew  what 
it  was  worth,  taking  off  the  cost  of  transportation.  He 
knew  that  the  Bank  of  England  was  bound  to  pay  that 
or  give  up  its  charter.  Their  object  was  to  make 
England  a  gold  emporium  and  chain  the  gold  standard 
upon  the  people  of  the  whole  world,  and  they  have  al- 
most succeeded  in  that  gigantic  endeavor.  By  fixing 
the  price  of  gold  they  enhanced  it8  value  and  forced 
the  world  to  take  their  standard. 

If  this  country  should  now  surrender  silver  it  be- 
comes like  iron  or  lead  or  any  other  metallic  commodity, 
and  its  qualities  as  money  are  destroyed  forever.  I  re- 
peat, if  I  looked  at  this  subject  from  the  English  stand- 
point I  would  unquestionably  advocate  gold.  Gold 
represents  the  genius  of  financial  centrality.  If  En- 
gland can  bring  the  whole  world  to  a  gold  standard, 
with  her  vast  carrying  trade,  with  her  large  colonial 
system,  she  is  mistress  of  commerce  and  finance. 

Who  could  have  stated  the  matter  more  succinctly 
and  distinctly  than  Mr.  Gladstone  did  in  the  debate  in 
the  House  of  Commons  three  months  ago  on  the  oon- 


8ENAT0B  OEOROE  O.  VEST.  149 

tinuation  of  the  Brussels  conference  ?  Mr.  Gladstone 
said,  "  Why  continue  the  conference  ?  What  necessity 
is  there  for  England  to  send  any  more  commissioners  f 
We  do  not  intend  to  go  to  anything  else  but  the  gold 
standard.  We  are  the  creditor  people  of  the  worldf 
and  we  want  money  to  have  the  highest  purchasing 
capacity,  the  largest  quantity  of  which  can  be  put  in 
the  smallest  bulk." 

That  is  an  honest  statement.  He  said,  "We  da 
not  propose  to  negotiate."  Germany  has  joined  En- 
gland. After  Germany  had  wrested  with  iron  hand 
from  France  $1,000,000,000,  principally  in  gold,  she 
looked  across  the  channel  and  saw  England  the  mis- 
tress of  the  seas,  and  Bismarck,  looking  to  the  splendid 
future  of  a  consolidated  empire,  whose  commerce 
should  rival  that  of  Great  Britian  as  her  armies  had 
conquered  France,  said,  "  We  will  go  to  the  same  basis 
financially ;  we  will  adopt  gold."  Then  they  took  their 
silver,  melted  it  into  bars,  carried  it  over  to  France 
across  the  frontier,  and  added  insult  to  injury  by  ask- 
ing the  French,  after  paying  them  $1,000,000,000  of 
war  indemnity,  to  coin  their  silver  in  order  to  help 
them  to  get  more  gold  in  their  rivalry  with  Great 
Britain. 

I  have  said  that  I  believe  the  principal  object  of  the 
English  government  is  to  concentrate,  as  far  as  they 
can,  their  commerce,  wealth,  or  the  products  of  it,  in 
the  merchants  of  England,  the  commercial  classes.  As 
to  their  nobility  and  the  landed  aristocracy,  their 
autonomy  provides  for  them  ;  but  in  the  carrying  trade, 
in  the  extension  of  commerce  and  the  use  of  the  in- 
strumentalities that  are  most  valuable  to  commerce,  and 
gold  ig  one  of  them,  they  hope  by  confitant  accretioiis 


150  SILVER  AND  GOLD. 

to  make  the  British  Empire  the  most  magnificent  the 
world  has  ever  seen. 

Whenever  one  of  their  colonies  comes  in  contact 
with  this  system  of  home  accretion  the  British  Parlia- 
ment immediately  takes  the  province  in  hand  and  cor- 
rects that  mistake.  While  England  ostensibly  allows 
everyone  of  her  colonies  to  fix  its  own  tariff,  she  man- 
ages most  decidedly  and  absolutely  to  make  that  tariff, 
whatever  it  is,  subordinate  to  the  interest  of  the  Eng- 
lish manufacturer  at  home. 

Now,  there  is  a  significant  fact  in  regard  to  the  de- 
monetization or  attempted  demonetization  of  silver  in 
India,  and  I  read  again  from  ^Jiis  pamphlet : 

"  Soon  after  the  rise  of  gold  began  in  1878  a  large 
cotton-spinning  trade,  begun  previously  in  India,  with 
English  machinery,  to  supply  India  itself,  felt  at  once 
the  stimulus  supplied  by  the  difference  in  exchange. 
It  prospered  rapidly,  grew,  and  continues  growing  fast 
and  steadily,  and  exports  to  China  and  other  silver 
countries.  Here  are  comparisons  of  the  English  and 
Indian  exports  of  cotton  yarn,  in  pounds,  to  China, 
Hongkong,  and  Japan,  which  have  for  some  time  been 
supplied  annually  to  the  Economist  by  Mr.  Abraham 
Haworth,  of  Manchester.  They  show  how  the  product 
of  silver  wages  beats  the  product  of  gold  wages,  and 
beats  them  more  as  the  divergence  between  the  metals 
widens. 

"  The  quantities  are  given  in  pounds  weight.  The 
contrast  between  the  stationary  quantities  from  En- 
gland and  the  rapid  expansion  of  the  Indian  export  in- 
dicates plainly  a  sad  future  for  Lancashire  trade  if  gold 
wages  there  must  continue  competing  with  silver  wages 
in  foreign  markets.  India  will  on  the  present  footing 
beat  Lancashire  everywhere,  meanwhile  in  the  large 
class  of  goods  made  of  Indian  cottons,  but  ultimately  in 
any  mAt;)riaL" 


SENATOR  GEORGE  G.  VEST.  161 

Then  follow  statistics  showing  that  from  1876  to  ■ 
1881,  England  exported  to  China  and  Japan  yearly 
$38,560,000  in  these  cotton  goods.  India  then  exported 
only  $19,641,000.  From  1882  to  1887  England  had 
dropped  off  to  $33,682,000,  India  having  increased  from 
$19,641,000  to  $71,319,000.  In  1888,  one  year,  En- 
gland sent  to  China  and  Japan  $44,642,600  worth,  and 
India  went  from  $71,319,000,  the  preceding  year,  to 
$114,707,300.  In  1889  England  sent  to  China  and  Ja- 
pan $35,720,200  of  these  cotton  goods,  and  India  $126,- 
766,800  against  $114,707,800  the  preceding  year. 

In  1890  England  exported  to  China  and  Japan  $38,- 
057,400.  In  the  meantime,  in  the  same  year,  the  Indian 
export  increased  from  $126,766,800  to  $145,112,800 
worth  of  cotton  manufactures,  and  it  was  time  for  the 
English  merchants  to  stop  this  rivalry.  The  child  had 
outgrown  the  parent.  The  colonial  manufacturers  had 
taken  away  the  market  in  Japan  and  China,  and  it  was 
necessary  to  do  away  with  silver  in  order  that  the 
monopoly  of  this  eastern  trade  might  go  back  where  it 
had  originally  been,  in  th?  English  manufacturer  and 
the  English  merchant. 

We  are  told  that  the  Ba/»k  of  England  controls  the 
finances  of  the  world.  It  is  a  poor  argument,  it  seems 
to  me,  to  a  people  who  in  twenty-five  years  have  paid 
off  two-thirda  of  a  war  debt  of  $3,000,000,000,  to  tell 
us  that  England  has  more  financial  ability  and  is  a 
stronger  country  in  a  monetary  sense  than  the  United 
States.  The  Bank  of  England  is  not  the  mistress, 
financially,  of  the  world ;  it  is  not  the  largest  bank  in 
the  world.  If  our  friends  the  monometalists  would  be 
more  accurate  and  go  to  the  resources  of  the  large 
banks  of  the  world,  they  would  find  this  to  be  so.     The 


152  SILVER  AND  GOLD. 

Bank  of  Germany  has  $185,000,000  of  gold  and  $100,- 
000,000  of  silver. 

I  call  the  attention  of  the  senate  to  the  fact  that  we 
are  constantly  told  that  Germany  is  on  a  gold  basis. 
Germany  has  $100,000,000  in  silver  thalers  of  full  legal 
tender  quality  to-day,  perfectly  equal  with  gold,  and  at 
the  ratio  of  15^  to  1.  Every  dollar  of  it  is  in  cir- 
culation, answering  all  the  purposes  of  gold. 

I  see  in  a  New  York  paper,  carried  away  by  the 
enthusiasm  of  the  gold  standard,  a  statement  that  Ger- 
many would  hail  with  acclaim,  quoting  some  Amster- 
dam merchant,  if  we  should  go  now  to  the  bimetallic 
standard  and  continue  to  coin  silver,  because  Germany 
would  immediately  unload  her  waste  silver  on  the 
United  States.  Has  not  Germany  had  an  opportunity 
to  do  that  under  the  Bland  act  and  under  the  Sherman 
act  ?  If  silver  is  a  drug  in  the  market  and  they  want 
to  sell  it  at  any  price,  why  have  they  not  brought  it 
here  ?  If  they  are  so  sick  of  it  they  would  take  any- 
thing for  it  If  it  is  the  drug  that  they  say  is  now  creat- 
ing financial  dyspepsia  in  Germany,  why  do  they  not 
throw  it  out,  even  if  it  takes  lobelia  and  ipecac  ?  They 
have  $100,000,000  full  legal  tender  silver,  and  yet  Ger- 
many is  on  the  exclusive  gold  standard.  The  Bank 
of  Germany  has  $185,000,000  in  gold  and  $100,000,- 
000  in  silver.  The  Bank  of  England,  the  boasted 
mistress  of  the  finances  of  the  whole  world,  before 
whose  fetish  we  are  to  bow  down  now  or  we  shall  cease  to 
exist  as  one  of  the  first  nations  of  the  world,  has 
$185,000,000  of  gold  and  no  silver,  except  subsidiary 
coin.  It  is  true  under  the  law  of  England — now  mark 
it — that  any  man  from  any  part  of  the  world  can 
draw  gold  out  of  that  bank ;  yet  whenever  they  find 


8EKAT0K  GEORGE  O.  VEST.         168 

that  the  export  of  gold  is  too  large,  they  put  up  the 
rate  of  interest  and  stop  the  exportation.  Ostensibly 
they  say  to  the  whole  world :  "  We  are  on  the  gold 
standard ;  come  and  get  all  the  gold  you  want,  and  we 
will  pay  you  £S  lis.  Sd.  for  every  ounce  you  bring  us." 
Yet,  the  minute  they  find  there  is  too  much  gold  going 
out,  they  put  up  the  rate  of  interest  and  prevent  its  ex- 
portation and  contradict  absolutely  their  pretense. 

Spain  has  $35,000,000  in  gold  and  $20,000,000  in  sil- 
ver. Austria-Hungary  has  $65,000,000  in  gold,  and 
$85,000,000  in  silver.  The  Bank  of  France  has  $330,- 
000,000  in  gold  and  $226,000,000  in  silver,  and  Mr. 
Horace  White  says  in  an  article  which  attracted  my 
attention  in  the  last  forum,  that  the  man  who  says 
that  France  is  on  a  bimetallic  basis  is  an  idiot,  and 
ought  not  to  be  listened  to  in  any  part  of  this  country. 
He  says  the  poor  creatures  actually  believe  it  when 
they  say  it ;  but  they  are  ignorant,  they  do  not  know, 
they  are  not  numbered  with  the  financial  four  hun- 
dred who  understand  this  question.  France  not  a 
bimetallic  country  with  two  hundred  and  twenty-five 
millions  of  legal  tender  silver  in  the  reserve  of  the 
Bank  of  France  to-day  I 

And  seven  hundred  millions  of  standard  silver  dol- 
lars in  the  whole  country,  and  yet  it  is  not  a  bimetallic 
country !  Mr.  White  says  in  this  article  that  as  soon 
as  you  refuse  coining  a  metal  it  is  demonetized.  I  be- 
long to  those  poor,  benighted,  and  ignorant  creatures 
who  think  that  when  you  demonetize  a  metal  it  ceases 
to  be  money.  Is  not  silver  money  in  France  to-day,  in 
Germany,  in  Austria-Hungary,  in  Holland,  and  in 
Russia  ?  Yet  he  says  that  denying  it  free  coinage  de- 
monetized silver;  in  other  words,  that  silver  is  not 


164  SILVER  AND  GOLD. 

money  to-day  in  the  United  States.  I  must  contetfS 
that  I  am  benighted  if  his  definition  is  correct ;  but  I 
am  not  surprised  at  it.  Listen  to  what  Mr.  White  says 
about  this  question  and  about  India.  Here  is  the  spirit 
of  monometallism.  I  am  not  caviling  about  words,  but 
It  shows  the  genius  of  this  centralizing  scheme,  to  use 
no  other  word,  which  is  now  being  urged  upon  ouir 
people.    He  says : 

"  It  would  be  rash  for  anybody  to  predict  the  future 
course  of  events  in  India.  We  may  be  pretty  sure, 
however,  that  the  men  who  have  directed  it  and  who 
are  responsible  for  its  consequences  have  not  acted 
without  careful  circumspection.  If  they  are  censurable 
at  all  it  is  for  too  great  delay  rather  than  for  undue 
haste.  But  before  anybody  censures  them  for  too  great 
delay  let  him  put  himself  in  their  place.  Let  him 
charge  himself  with  the  destinies  and  fortunes  of  260,- 
000,000  of  people,  for  the  most  part  very  poor  and  too 
ignorant  to  know  what  is  good  or  bad  for  them  in  a  fi- 
nancial way. 

*^In  this  last  particular  they  are  not  alone  among 
the  nations  of  the  earth,  but  the  peculiarity.in  India  is 
that  a  handful  of  men  have  to  decide  the  most  impor- 
tant questions  without  much,  if  any,  aid  from  public 
opinion,  and  without  ever  referring  them  to  the  hust- 
ings. When  it  comes  to  questions  of  high  finance  this 
may  be  an  advantage  to  the  governed,  but  it  adds  enor- 
mously to  the  responsibilities  of  the  governors  and  will 
surely  give  them  pause  when  such  a  momentous  step  is 
to  be  taken  as  a  change  in  the  monetary  standard." 

It  is  a  blessing  to  have  the  favored  few  to  determine 
these  questions  for  you ;  it  is  a  great  boon  of  Provi- 
dence that  a  few  gentlemen  in  New  York  are  to  deter- 
mine this  question  for  the  American  people,  and  all  of 
us  who  decline  to  follow  them  and  abandon  the  tradi- 


8BNATOB  GEORGE  6.  VEST.   "     •  ^      .     185* 

\  •  •  - 

V 

tions  and  policy  of  the  goverDment  and  the  manifest  * 
dictates  of  common  justice  are  either  guilty  of  a  crime 
intentionally,  or  else  we  are  put  in  the  role  of  lunatics. 
It  is  a  favorite  expression  now  to  talk  of  the  ^*  silver 
lunacy."  • 

I  am  ready  to  follow  that  great  lunatic,  Thomas 
Jefferson,  on  this  question.  I  am  willing  to  follow  the 
men  who  made  the  Constitution  of  1789,  and  said  that 
no  State  should  make  anything  but  gold  and  silver  a 
legal  tender  for  the  payment  of  debts.  If  they  did  not 
mean  that  silver  was  a  money  metal,  then  the  English 
language  has  become  so  nebulous  as  to  be  useless. 

The  Bank  of  France  has  three  hundred  and  thirty 
millions  of  gold  and  $225,000,000  of  silver.  The  Rus* 
sian  State  Bank  has  $480,000,000  of  gold. 

We  are  told  that  it  is  impossible  to  sustain  silver 
in  this  country  unless  we  have  a  conference  with  other 
nations  of  the  world  and  all  will  agree  to  it.  France 
sustained  the  bimetallic  standard  for  eighty  years  be- 
fore 1873,  with  Germany  on  one  side  on  an  exclusive 
silver  basis  and  England  on  the  other  with  a  gold  basis ; 
and  to-day  the  French  people  are  financially  the  first 
people  in  existence.  England,  the  so-called  mistress  of 
finance,  when  the  Baring  failure  took  place  and  the 
world  was  racked  and  tortured  with  doubt  and  uncer- 
tainty, borrowed  $16,000,000  in  gold  from  the  Bank  of 
France  in  order  to  sustain  her  credit— $16,000,000  in 
gold  from  a  country  which  had  $700,000,000  of  legal 
tender  silver  and  $226,000,000  of  it  a  bank  reserve  I 

Now,  look  at  the  South.  There  are  4,000,000  ne- 
gro peasants,  anxious  to  get  silver.  All  of  us  who 
know  them  know  that  they  prefer  silver  to  any  metal 
in  the  world.     Why  can  we  not  float  $600,000,000  of 


156  SILVER  AND  GOLD. 

9ilver  in  this  country,  instead  of  being  told  that  we 
are  shipwrecked  if  we  continue  the  process  another 
day  ?    Why  are  we  to  demonetize  it  ? 

Why,  if  I  have  heard  anything,  it  was  that  to  go  on 
with  the  increase  of  silvet  metal,  even  to  buy  the  bul- 
lion and  issue  the  bullion  notes  under  the  Sherman 
act,  would  bring  us  to  bankruptcy. 

Why,  I  ask  now,  can  we  not  go  to  silver  coinage 
with  a  country  increasing  in  population  as  no  country 
in  the  world  has  ever  increased,  when  we  are  standing 
almost  sword  in  hand  to  keep  immigration  from  our 
soil?  France  is  a  finished  country — accompli^  to  use 
their  own  tongue — with  her  population  fixed,  and  yet 
she  maintains  this  enormous  amount  of  silver,  and  is 
to-day  the  strongest  nation,  financially,  in  the  world. 
The  Director  of  the  Mint  said  recently,  as  to  the  finan- 
cial power  of  France,  and  it  is  also  valuable  as  show- 
ing the  effect  of  legislation  on  the  price  of  silver : 

"The  French  ratio  of  1  to  16 J  was  a  fixed  point 
about  which  the  price  of  silver  moved.  The  London 
price  fixed  the  relative  value  of  silvor  and  gold  for  the 
commercial  world,  but  the  commercial  value  could 
never  vary  very  widely  from  the  coinage  value  as  long 
as  the  mints  of  the  Latin  Union  stood  ready  to  trans- 
form gold  and  silver  into  coin  at  the  ratio  of  1  to  15|." 

I  say  that  it  is  not  the  overproduction  of  silver 
which  has  brought  down  its  value.  The  reports  of  our 
Director  of  the  Mint  show  that  the  legislation  of  1878 
of  this  country  and  Germany  caused  the  phenomenal 
and  abnormal  fall  in  the  price  of  silver.  How  could 
we  expect  this  metal  to  hold  its  own  with  gold  when 
we  had  taken  away  from  it  its  chief  value,  that  of 
noney  ? 


SENATOR  GBORGB  O.  VEST.         157 

The  report  of  the  director  of  the  mint  for  the  last 
year,  1892,  shows  that  we  produced  in  this  country 
$33,000,000  in  gold,  and  $11,376,037  was  taken  for  the 
arts,  leaving  a  little  over  $20,000,000  in  the  United 
States  of  gold  production  and  $74,000,000  in  silver,  out 
of  which  $7,209,362  was  taken  for  the  arts— $74,000,000 
of  silver,  with  a  population  of  67,000,000,  increasing  at 
the  rate  of  from  500,000  to  600,000  each  year,  and  with 
enormous  resources  and  this  increasing  population  and 
the  negro  population  of  the  South  anxious  to  take  sil- 
ver, and  preferring  it,  we  are  told  that  we  can  not  float 
silver  if  we  have  free  coinage. 

In  the  Brussels  Conference  I  was  struck  with  this 
statement  coming  from  Mr.  Boissevain,  the  delegate 
from  the  Netherlands.     He  said  : 

"In  my  opinion  the  chief  cause  of  the  fall  in  the 
gold  price  of  silver  has  been  the  enormous  decrease  ir 
the  monetary  use  of  silver  during  the  last  twenty  years 
in  consequence  of  the  legislative  measures  which  datt 
from  the  new  monetary  law  enacted  in  Germany." 

How  could  we  expect  silver  to  maintain  its  value 
when  the  two  largest  nations  in  the  world,  the  two 
most  important  nations,  Germany  and  the  United 
States,  struck  it  down  and  took  away  from  it  its  money 
value  and  reduced  it  to  the  basis  of  silver  spoons  and 
forks  and  plate  ?  We  give  free  coinage  to  gold,  and  it 
goes  up  and  up,  and  we  say  to  it  "  lo  triumpheJ*^  Here 
is  the  idol  financially  of  the  whole  world  I  Take  away 
the  monetary  value  of  silver,  and  then  say,  "  Here  is  a 
metal  that  is  debased  and  depreciated."  What  has 
done  it  ?  I  have  read  the  tables  to  show  that  overpro- 
duction did  not  do  it.     It  was  legislation  that  did  it ; 


168  SILVER   AND   GOLD. 

the  settled  determination  by  adverse  laws  for  the  ben^ 
fit  of  the  capitalists  and  the  financial  centralizationista 
of  the  world  to  bring  us  to  a  gold  basis  for  their  own 
purposes. 

But  there  is  another  consideration.  Argument  would 
be  so  potential  as  to  amount  to  demonstration  before  I 
would  ever  agree  to  strike  down  one  section  of  this 
country  and  prostrate  it  for  all  time  to  come.  If  we 
are  to  destroy  silver,  there  are  a  million  people  in  the 
Western  silver-producing  States  whose  principal  pro- 
duct is  destroyed. 

It  was  said  the  other  day,  rather  dramatically,  by  an 
ex-member  of  this  body,  that  in  the  extreme  West  the 
people  are  crying  for  bread  and  in  New  York  they  are 
crying  for  gold.  I  have  letters  now  in  my  committee 
room  from  friends  who  went  from  my  State  to  Colorado, 
stating  that  they  had  given  all  they  could  give  to  the 
houseless  and  homeless  and  hungry,  and  they  could 
give  no  longer.  Suppose  we  to-day  were  called  upon 
to  pass  a  law  stopping  the  factories  of  New  England. 
Sir,  language  fails  to  describe  the  torrents  of  eloquence 
we  would  hear  from  that  section  in  protest. 

Suppose  we  were  called  upon  to  strike  down  the 
wheat  product  of  the  Dakotas  and  the  Red  River  of 
the  North,  would  we  not  expect  to  hear  from  every  man 
in  that  section  who  was  able  to  utter  a  sentence  in  pro- 
test against  this  destruction  of  property  and  even  of 
life?  I  know  how  a  senator  feels  in  fighting  against 
a  proposed  law  that  he  honestly  believes  will  destroy 
all  the  prosperity  of  his  section.  When  the  force  bill 
was  here,  with  my  convictions  I  would  have  sacrificed 
life  to  defeat  it ;  and  if  I  were  here  from  one  of  those 
silver-producing  States  in  the  West  I  would  fight  th^ 


BENATOB  GEORGE  G.   VEST.  159 

demonetization  of  silver  as  I  fought  the  force  bill,  for 
it  involves  all  that  those  people  can  hold  dear  in  the 
way  of  property  rights  and  the  comforts  of  life. 

I  say  arguments  must  be  brought  here  ^^  stronger 
than  proofs  of  Holy  Writ  "  to  make  me  do  this.  If  I 
can,  by  any  possibility,  by  legislation,  tentative  or 
otherwise,  keep  this  great  disaster  from  those  people, 
citizens  of  this  Republic,  of  the  same  blood  and  lineage 
with  ourselves,  I  will  take  the  responsibility  of  even  a 
mistake  on  my  part  rather  than  perpetrate  what  I  con- 
sider such  an  outrage.  I  know  those  Western  States, 
not  from  description,  but  experience ;  I  know  what 
their  people  have  endured  in  leaving  the  comforts  of 
what  was  then  civilization  in  the  Eastern  and  Middle 
States,  and  going,  with  rifle  in  one  hand  and  pick  in  the 
>ther,  to  blaze  the  pathway  of  civilization  in  the  caELons 
>f  the  Rocky  Mountains.  They  have  built  up  this  in- 
iustry  upon  the  faith  pledged  to  them  by  the  people  of 
^he  United  States  in  its  Constitution  and  laws  that  the 
J)roduct  of  those  mines  should  be  considered  as  a  money 
metal ;  and  we  are  now  asked,  because  the  financial 
four  hundred  in  New  York  and  the  commercial  classes 
in  England  think  they  alone  intellectually  can  dispose 
of  this  question,  to  beggar  these  people  and  say  to 
them,  "  Find  something  else  to  do ;  we  wapt  gold,  gold, 
gold." 

A  single  word  about  the  necessity  for  an  interna- 
tional agreement.  I  have  endeavored  as  best  I  could 
to  study  this  question  and  I  have  come  to  this  conclu- 
sion :  Every  civilized  country  in  the  world  has  consulted 
its  own  self-interest  and  established  its  own  basis  of 
money.  Take  the  report  of  the  Herschell  committee, 
that  examined  into  this  whole  question  in  order  to  aa* 


160  SILVER  AND  GOLD. 

certain  what  were  the  financial  systems  of  the  different 
countries  of  the  world  before  they  would  make  a  re- 
commendation as  to  India  to  the  English  Parliament. 

I  am  told  that  we  are  to  come  under  a  regular  rule  and 
that  this  is  a  scientific  process,  which  insures  unanimity 
and  international  agreement.  There  is  Russia,  with 
paper  money  payable  in  roubles,  which  are  never  seen, 
and  there  is  neither  gold  nor  silver  in  circulation,  al- 
though they  have  an  enormous  war  chest  of  $480,000,- 
000  in  gold.  There  is  France,  as  I  have  shown,  on  the 
gold  standard,  with  $700,000,000  of  legal  tender  silver. 
There  is  Austria-Hungary,  with  gold  and  silver.  There 
is  Holland,  with  a  large  silver  circulation,  though  on  a 
gold  standard,  and  so  on.  But  I  will  read  the  synop- 
sis, though  I  can  not  refrain  from  giving  a  crumb  of 
comfort  to  my  friends  the  Populists.  Here  is  a  pros- 
perous country,  that  has  neither  gold  nor  silver,  but  en- 
tirely irredeemable  paper.  The  Herschell  commission 
says  in  the  case  of  Brazil : 

'^  The  case  of  Brazil  is  perhaps  the  most  remarkable  of 
all  as  showing  that  a  paper  currency  without  a  metal- 
lic basis  may,  if  the  credit  of  the  country  is  good,  be 
maintained  at  a  high  and  fairly  steady  exchange,  al- 
though it  is  absolutely  inconvertible  and  has  been  in- 
creased by  the  act  of  the  government  out  of  all  propor- 
tion to  the  growth  of  the  population  of  its  foreign  trade. 
The  case,  it  need  hardly  be  said,  is  not  quoted  as  a  prec- 
edent which  it  is  desirable  to  follow. 

'^  The  Brazilian  standard  coin  is  the  milreis,  the  par 
gold  value  of  which  is  27d.  A  certain  number  were 
coined,  but  have  long  since  left  the  country,  and  the  cur- 
rency is  and  has  since  1864  been  inconvertible  paper. 
The  inconvertible  paper  was  more  than  doubled  be- 
tween 1866  and  1888,  but  the  exchange  was  about  the 
tame  at  the  two  periods,  and  very  little  below  the  par 


8ENAT0B  GEOBOB  G.  VEQT.         161 

of  27d.  It  had  gone  down  to  14df,  in  1868,  the  date  of 
the  war  with  Paraguay,  but  had  risen  again,  and  was, 
in  1875,  as  high  as  28|c2.  In  1869,  when  the  quantity 
of  paper  money  was  increased  from  £12,468,000  to 
jC  18,322,000,  the  mean  rates  of  exchange  showed  an  ad- 
vance of  about  llf  per  cent.  Since  the  revolution  which 
displaced  the  empire  and  established  the  republic  the 
paper  issues  of  the  banks  were  increased  by  more  than 
j£ 30,000,000  in  less  than  three  years,  so  that  the  paper 
issue  in  1892  amounted  to  £51,872,700,  and  as  the  re- 
sult of  this  and  of  diminished  credit  the  exchange  in  that 
year  ranged  from  lOJi,  to  15|d." 

It  is  a  remarkable  fact  that  Brazil  to-day  has  neither 
gold  nor  silver  as  a  basis,  but  has  simply  fiat  and  in- 
convertible money. 

But  I  come  now  to  the  synopsis  and  conclusion  of 
the  commission  after  examining  all  the  financial  sys* 
tems  of  the  world : 

"  It  is  impossible  thus  o  review  foreign  systems  of 
currency  without  feeling  tLat,  however  admirable  may 
be  the  precautions  of  our  own  currency  system,  other 
nations  have  adopted  difiFerent  systems  which  appear  to 
have  worked  without  difficulty,  and  have  enabled  then, 
to  maintain  for  their  respective  currencies  a  gold  stand- 
ard and  a  substantial  parity  of  exchange  with  the  gold- 
using  countries  of  the  world,  which  has,  unfortunately, 
not  been  the  case  with  India.  This  has  been  effected 
under  all  the  following  conditions,  viz — " 

I  ask  attention  to  this  extraordinary  condition  of 
financial  affairs,  when  it  is  demanded  of  us  that  all  the 
world  shall  come  to  one  ratio  and  standard  of  value — 

"  (a)  With  little  or  no  gold  coin,  as  in  Scandinavia, 
Holland,  and  Canada ; 

'^  (5)  Without  u  mint  or  gold  coinage,  as  in  Canada 
aad  the  Dutch  East  Indies ; 


18S  SILVEB  AND  GOLD. 

"  (c)  With  a  circulation  consisting  partly  of  gold,  partly 
of  overvalued  and  inconvertible  silver,  which  is  legal  ten- 
der to  an  unlimited  amount,  as  in  France  and  other 
countries  of  the  Latin  Union,  in  the  United  States,  and 
also  in  Germany,  though  there  the  proportion  of  over- 
valued silver  is  more  limited,  the  mints  in  all  these 
countries  being  freely  open  to  gold,  but  not  to  silver, 
and  in  some  of  them  the  silver  coinage  having  ceased ; 

**  (^d)  With  a  system  under  which  the  banks  part  with 
gold  ireely  for  export,  as  in  Holland,  or  refuse  it  for 
export,  as  in  France ; 

"  (e)  With  mints  closed  against  private  coinage  of  both 
silver  and  gold,  and  with  a  currency  of  inconvertible 
paper,  as  has  been  temporarily  the  case  in  Austria ; 

"(/)  With  a  circulation  based  on  gold,  but  consisting 
of  token  silver,  which,  however,  is  legal  tender  to  an 
unlimited  extent  as  in  the  West  Indies.  The  case  of 
Holland  and  Java  is  very  remarkable,  since  in  that 
case  the  gold  standard  has  been  maintained  without 
difficulty  in  both  countries,  although  there  is  no  mint  in 
the  Dutch  East  Indies,  no  stock  of  gold  there,  and  a 
moderate  stock  of  gold  in  Holland ;  whilst  the  currency 
consists  of  silver  and  paper  legally  and  practically  incon- 
vertible into  gold,  except  for  purposes  of  export.  The 
case  of  Canada,  which  maintains  a  gold  standard  with- 
out a  gold  coinage,  is  also  very  remarkable. 

"The  case  of  Austria-Hungary  is  also  interesting,  and 
presents  a  remarkable  contrast  to  that  of  India. 

"It  will  be  seen  that  a  country  with  a  silver  standard, 
and  a  currency  consisting  partly  of  overvalued  silver  but 
chiefly  of  inconvertible  paper,  has  been  able,  by  closing 
its  mints  against  private  coinage  for  a  series  of  years, 
and  whilst  still  continuing  to  coin  silver  on  govern- 
ment account,  to  maintain  a  fairly  steady  rate  of  ex- 
change with  gold  using  countries  for  a  considerable 
period  preparatory  to  adopting  a  gold  standard." 

In  the  face  of  this  statement,  what  becomes  of  the 
argument  that  w«  can  not  maintain  exchange  with  tht 


(CHARLES  F.    CKISP, 


SENATOR  OEOBOE  G.  VEST.  166 

gold  countries  of  Europe  if  we  have  silver  coinages  in 
the  United  States?  Here  I  have  read  the  absolute 
proof  that  these  countries  maintain  their  exchanges, 
and  yet  some  of  them  have  silver  and  gold,  some  have 
silver  alone,  others  have  paper  inconvertible  into  either 
silver  or  gold. 

I  repeat  my  statement,  that  this  financial  question, 
instead  of  being  one  of  a  great  national  brotherhood,  of 
which  we  have  heard  so  much  lately,  is  simply  a  maimer 
of  adjustment  according  to  the  self-interest  of  the  coun- 
tries which  are  called  upon  to  act  for  themselves.  If, 
with  our  resources,  we  can  not  maintain  any  system,  I 
am  mistaken  in  the  American  people  and  thfJr  history. 

We  have  come  to  the  parting  of  the  waj's»  We  are 
now  at  that  point  when  one  road  leads  to  the  gold 
standard  and  the  other  to  the  bimetallism  which  our 
fathers  established,  and  which  the  policy  and  traditions 
of  this  country  have  always  favored.  That  we  may 
consider  it  with  a  deep  sense  of  the  responsibility  rest- 
ing upon  us  for  ourselves  and  our  posterity  is  the  duty 
of  every  legislator.  If  a  Democrat  can  not  be  a  Demo- 
crat in  the  larger  sense  of  the  term,  he  should  not  ap- 
proach it ;  if  a  Republican  can  not  be  a  Republican 
without  looking  to  his  party  standard  and  the  narrow 
signification  of  nomenclature,  let  him  not  approach  it; 
if  our  friends,  the  Populists,  can  not  consider  this  ques- 
tion without  antagonism  to  both  the  old  parties,  they 
have  forgotten  the  meaning  of  the  name  of  their  party, 
the  People's  party  of  the  country. 
10 


^id  SILYEB  AKD  GOLD. 


CHAPTER  IV. 

BT  aiSfiATOIt  G£0BOB  F.  HOAB  OF  MASSAGHUSBTTS. 

Thb  American  people  have  no  reason  to  be  ashamed 
of  their  legislative  history.  Our  American  constitu- 
tions, as  well  as  the  great  measures  which  crowd  and 
adorn  our  statute  book,  have  very  often  been  the  prod- 
uct of  times  of  excitement,  of  depression,  and  almost 
of  despair.  They  have  been  enacted  amid  predictions 
of  failure,  amid  taunts  and  expressions  of  contempt 
from  foreign  critics,  and  against  powerful  and  angry 
opposition  at  home. 

It  has  been  the  good  fortune,  as  it  has  been  the 
glory  of  the  American  people,  that  it  has  ever  plucked 
the  flower  Safety  from  the  nettle  Danger ;  that  it  has 
made  times  of  distress  and  commotion  and  evil  its 
great  opportunity.  From  the  gloom  of  the  Revolution, 
from  the  sorry  story  of  the  years  which  followed  the 
peace  of  1783 — of  feeble  government,  of  disaster,  of 
discontent,  of  broken  faith,  of  depreciated  currency,  of 
stay  laws,  of  suffering  debtors,  of  cheated  creditors,  of 
lawlessness,  of  Shay's  rebellion,  and  popular  commo- 
tions north  and  south — came  the  state  constitutions, 
the  ordinance  of  1787,  the  Constitution  of  the  United 
States,  the  judiciary  act,  and  the  great  legislation, 
State  and  National,  which  is  at  the  foundation  of  all  our 
institutions. 

From  the  abject  history  of  the  Jefferson  admhiistra- 
tion  came  the  acquisition  of  Louisiana,  the  establish- 


SENATOR  OEOBOE  F.  HOAB.         167 

ment  of  sailors'  rights,  and  the  great  naval  glories  of 
the  war  of  1812.  From  the  unutterable  woe  of  the  re- 
bellion came  the  abolition  of  slavery,  the  permanent  es- 
tablishment of  national  authority,  and  the  legislative 
achievements  of  the  past  thirty  years. 

I  believe  that  from  the  present  panic,  if  we  will  but 
rise  to  the  occasion,  we  may  yet  get  an  equal  blessing, 
A  sound,  secure,  and  stable  currency. 

In  one  respect  the  condition  of  the  United  States 
is  peculiar.  We  settle  our  financial  policy  in  accord- 
ance with  the  popular  vote.  The  great  mercantile  na- 
tions of  the  world,  in  fact,  and  commonly  in  form,  re- 
fer such  things  to  experts.  The  administration  in 
Great  Britain  consults  the  governors  of  the  Bank  of 
England,  the  representatives  of  the  chief  mercantile 
houses,  a  few  men  who  have  become  recognized 
authorities  in  financial  circles,  and  acts  upon  their  ad- 
vice. Very  few  members  of  Parliament  would  think 
of  thrusting  their  own  judgment  into  a  debate  on  a 
financial  question  against  that  of  the  men  of  their 
own  party  who  are  their  recognized  leaders  on  such 
subjects.  I  suppose  this  is  still  more  true  of  France, 
of  Germany,  of  Belgium,  and  of  Holland. 

But  with  us  the  finances  of  the  country  have  been 
for  a  good  while  the  football  of  parties  and  of  factions. 
Every  demagogue  in  public  office,  or  seeking  public  of- 
fice, every  theorist  desiring  to  get  notoriety  by  ex- 
travagance, every  anonymous  and  reckless  scribbler  who 
escapes  contempt  only  by  concealing  his  personality, 
every  agitator  who  would  marshal  class  against  class, 
every  anarchist  who  seeks  to  overthrow  all  social  order, 
every  brawler  who  would  stir  the  passion  of  section 
against  section,  of   labor  against  capital,   of  debtor 


168  SILVER  AND  GOLD 

against  creditor,  of  the  poor  against  the  rich,  prates 
glibly  about  the  currency,  and  uses  some  misrepresenta- 
tion or  sophistry  about  the  currency  as  his  weapon  of 
mischief. 

Yet  nothing  is  more  certain  than  that  a  disturbance 
of  the  currency  is  an  advantage  only  to  the  classes  who 
'Sre  so  attacked,  and  brings  nothing  but  evil  and  dis- 
aster to  the  classes  to  whom  the  appeal  is  made.  As 
Daniel  Webster  said  nearly  sixty  years  ago  : 

"  He  who  tampers  with  ^Ae  currency  robs  labor  of  its 
bread.  He  panders,  indeed,  to  greedy  capital,  which  is 
keen  sighted  and  may  shift  for  itself;  but  he  beggars 
labor,  which  is  honest,  unsuspecting,  and  too  busy  with 
the  present  to  calculate  for  the  future.  The  prosperity 
of  the  working  class  lives,  moves,  and  has  its  being  in 
established  credit,  and  a  steady  medium  of  payment. 
All  sudden  changes  destroy  it.  Honest  industry  never 
comes  in  for  any  part  of  the  spoils  in  that  scramble 
which  takes  place  when  the  currency  of  the  country  is 
disordered.  Did  wild  schemes  or  projects  ever  benefit 
the  industrious?  Did  irredeemable  bank  paper  ever 
enrich  the  laborious  ?  Did  violent  fluctuations  ever  do 
good  to  him  who  depends  on  his  daily  labor  for  his  daily 
bread?     Certainly  never. 

"  All  these  things  may  gratify  the  greediness  for 
sudden  gain  or  the  rashness  of  daring  speculation  ;  but 
they  can  bring  nothing  but  injury  and  distress  to  the 
homes  of  patient  industry  and  honest  labor.  Who  are 
they  that  profit  by  the  present  state  of  things?  They 
are  not  the  many,  but  the  few.  They  are  the  speculat- 
ors, brokers,  dealers  in  money,  and  lenders  of  money  at 
exorbitant  interest.  Small  capitalists  are  crushed,  and 
their  means  being  dispersed,  as  usual,  in  various  parts 
of  the  country,  and  this  miserable  policy  having  de- 
stroyed exchanges,  they  have  no  longer  either  money  or 
credit.  And  all  classes  of  labor  partake,  and  must  par- 
take,  in  the  same  calamity." 


SENATOB  GEOBGE  F..  HOAB.  169 

There  aie  subtleties  iu  these  financial  questions  sur- 
passing the  subtleties  of  metaphysics.  No  theologian, 
no  schoolman,  no  doctor  of  the  civil  law,  no  writer  on 
contingent  remainders  or  resulting  trusts  or  executory 
devises  was  ever  called  upon  to  deal  with  more  hair- 
splitting distinctions  and  profound  speculations,  more 
logical  puzzles  bafiBing  the  human  intelligence  than  can 
be  found  in  the  works  of  writers  on  finance  in  this  or 
other  generations.  And  yet  it  is  not  too  much  to  say 
that  there  is  no  subject  of  legislation  which  so  demands 
wise  and  dispassionate  consideration,  and  whose  clear 
Understanding  and  correct  resolution  k  "o  vital  to  all 
the  best  interests  of  society.  As  Alexani.e''  Hamilton 
declared  in  his  famous  report : 

"  The  general  state  of  debtor  and  of  crtditor ;  of  the 
relations  and  consequences  of  price ;  the  essential  in- 
terests of  trade  and  industry;  the  value  of  all  property ; 
the  whole  income,  both  of  the  state  and  of  individuals, 
are  liable  to  be  sensibly  influenced,  beneficially  or  other- 
wise, by  the  judicious  or  injudicious  regulation  on  this 
interesting  object." 

Credit  is  the  life-blood  of  trade.  A  sound  currency 
is  to  the  afiTairs  of  this  life  what  a  pure  religion  and  a 
sound  system  of  morals  are  to  the  afiairs  of  the  spiritual 
life.  And  we  should  beware  of  the  men  who  seek  to 
make  of  this  great  interest  an  instrument  of  personal 
or  party  advantage,  or  of  exciting  hatred  or  discontent, 
or  disturbing  social  order,  wherever  such  men  may  be 
found,  whether  in  high, places  or  low,  as  we  would  be- 
ware of  those  men  who  have  used  the  religious  feelings 
of  mankind  as  instruments  for  like  purposes. 

And,  as,  in  dealing  with  the  great  religious  problems 
which  concern  mankind  a  few  strong  instincts  and  a 


170  SILVER   AND  GOLD. 

few  plain  rules — the  lessons  of  experience — the 
authority  of  a  few  safe  guides,  are  found  by  the  masses 
of  mankind  sufficient  unto  salvation  ;  as  all  the  law  and 
the  prophets  are  summed  up  in  two  simple  command- 
ments, easily  to  be  understood,  and  easy  to  be  practiced, 
80,  I  believe,  the  path  of  safety  through  the  financial 
difficulties  which  surround  us  is  in  like  manner  to  be 
discerned. 

No  man  whom  the  American  people  have  trusted 
with  any  share  of  political  power  is  entitled  to  be  re- 
spected who  approaches  the  duty  of  this  hour  in  any 
partisan  or  sectional  spirit  or  inspired  by  the  desire  to 
reap  partisan  advantage  from  the  public  calamity.  Our 
task  is  to  discover  and  to  remedy  the  great  evil  under 
which  all  class  and  all  parts  of  the  country  suffer.  The 
workshops  are  closing,  the  banks  are  stopping  payment, 
workmen  are  idle,  the  homes  of  the  poor  are  threatened 
with  want,  and  the  property  of  the  rich  is  in  peril. 

I  can  conceive  of  no  better  evidence  of  the  pros- 
perity of  a  nation  than  that  its  people  are  universally 
well  employed  at  a  rate  of  wages,  or  other  form  of  com- 
pensation, which  yields  to  them  the  necessaries  and 
comforts  of  life.  Indeed,  it  is  not  so  proper  to  speak 
of  this  state  of  things  as  an  evidence  of  prosperity  as 
to  speak  of  it  as  the  definition  of  prosperity.  That 
was  the  condition  of  the  American  people,  beyond  any 
other  known,  in  the  autumn  of  1892,  and  for  a  long 
period  before.  The  president  himself,  in  his  late  mes' 
sage,  describes  the  situation :     % 

"  With  plenteous  crops,  with  abundant  promise  oi 
remunerative  production  and  manufacture,  with  un- 
usual invitation  to  safe  investment,  and  with  satis' 
factory  assurance  to  business  enterprise*" 


SENATOR  GEOBGE  F.  HOAB.         171 

Not  only  did  this  condition  of  things  exist,  but  by 
the  confession  of  our  eminent  statisticians,  free  trad- 
ers, and  nionometallists,  as  well  as  protectionists  and 
biinetallists,  it  was  a  conditionof  things  which  had  been 
improving  year  by  year.  The  purchasing  power  of 
wages  had  been  increasing  for  twenty  years,  although 
the  tendency  at  the  same  time  had  been  to  diminish  the 
length  of  the  day's  work.  The  problem  before  us  is  to 
restore  that  condition  of  things.  If  there  is  any  law  on 
the  statute  book  which  has  had  the  effect  to  disturb  it, 
or  if  there  be  any  threat  or  fear  of  new  legislation 
which  is  to  affect  or  disturb  it,  it  is  for  us  to  change 
that  law  and  to  make  that  legislation  impossible. 

This  misfortune  of  tlie  American  people,  in  regard 
to  this  currency  question,  is  the  spirit  and  temper  in 
which  it  has  been  debated.  It  is  difficult  to  find  upon 
either  side  an  honest  statement  of  the  other's  position 
or  an  honest  answer  to  the  other's  argument.  What 
bimetallist,  what  advocate  of  the  free  coinage  of  silver 
at  the  old  rate  can  recognis^e  himself,  or  his  opinion,  or 
anything  he  believes  in  and  stands  for,  in  the  portrait^ 
ure  drawn  by  his  antagonist  ?  What  man  who  believes 
either  that  we  must  submit  to  the  standard  of  value 
established  by  the  consent  of  the  commercial  world,  or 
who  even  believes  that  the  world's  supply  of  gold  is 
enough  to  meet  its  demands  for  a  standard,  or  a  cur- 
rency, without  sensible  fluctuation  or  change  of  value, 
entertains  any  of  the  opinions  or  desires  that  are  im« 
puted  to  him  by  the  press  or  by  public  speakers  in  cer- 
tain sections  of  the  country  ? 

Any  man  or  party  in  the  Eastern  States  who  should 
desire  to  have  the  value  or  the  purchasing  power  of 
the  dollar  increased  in  order  that  the  value  of  debts^ 


172  SILVER  AND  GOLD. 

or  that  assured  and  permanent  incomes  might  be  in- 
creased, or  in  order  that  speculation  in  gold  or  in  cred- 
its might  be  rendered  more  profitable,  would  be  hurled 
from  power  and  buried  in  infamy  by  the  swift  and 
righteous  indignation  of  the  whole  people  of  those 
States.  The  prosperity,  the  power,  the  happiness,  the 
rapid  growth  of  the  Northwest  and  the  South  are  as 
dear  to  the  people  of  New  England  as  their  own. 
What  they  want,  what  they  desire  and  strive  for,  is  not 
an  appreciating  standard  of  value  but  an  unchanging 
standard  of  value,  so  far  as  the  lot  of  humanity  will 
admit.  The  merchant,  the  manufacturer,  the  builder  of 
railroads  in  the  Eastern  States  is  a  constant  and  per- 
petual  debtor.  The  wage-earner,  the  depositor  in 
savings  banks,  the  holder  of  the  policy  of  life  insur- 
ances, the  widow  and  orphan  who  are  living  on  the 
spare  savings  of  the  husband  and  father  in  his  lifetime 
are  constant  and  perpetual  creditors.  They  are  alike 
interested  that  the  obligation  contracted  to-day  shall 
be  precisely  the  same  obligation,  no  greater  and  no 
less,  when  it  is  to  be  discharged,  five  or  ten  or  twenty 
years  hence,  or  whenever  its  annual  or  semi  annual  in- 
terest is  to  be  paid  throughout  that  period.  The  pres- 
ent value  of  the  dollar  as  a  mediun  of  present  ex- 
change  can  be  ascertained  with  reasonable  accuracy  by 
the  parties  to  any  contract. 

Appreciation  and  depreciation  can  be  ascertained  and 
provided  for.  But,  to  use  the  expressive  phrase  of 
Mr.  Belfour,  "  money  is  the  record  of  obligations  ex- 
tending over  long  periods  of  time."  And  it  is  an  in- 
jury, it  is  destruction  to  any  community  which  has 
risen  in  civilization  above  the  pirate  stage,  when  that 
record  is  liable  to  uncertainty  or  is  the  subject  of  specu" 


8ENAT0B  GEORGE  F,  HOAB.  178 

lation  or  gambling.  If  the  people  of  the  Northeast 
seem  to  the  people  of  another  part  of  the  country  to 
be  contending  for  anything  likely  to  bear  hardly  upon 
them,  it  is  because  they  do  not  see  or  anticipate  such  a 
result,  and  not  because  they  desire  it  or  are  indifferent 
to  it. 

So,  on  the  other  hand,  I  do  not  believe  that  any 
large  number  of  the  people  of  the  Northwest  desire  the 
destruction-  of  property,  impairment  of  credit,  or  any 
injury  whatever  to  the  people  of  the  Northeast.  Theib 
ambition  is  to  acquire  property,  their  hope  is  in  the  es- 
tablishment and  maintenance  of  credit.  They  always 
have  depended,  and  for  a  long  time  in  the  future  they 
must  depend,  for  these  things  on  a  close  alliance  and 
an  interchange  of  advantages  with  the  people  whose 
children  they  are,  with  the  States  whence  they  came, 
and  with  communities  from  whose  institutions  they 
have  modeled  their  own,  and  with  whom  in  the  great 
and  glorious  future  .they  must  live  or  bear  no  life. 
Chief  among  the  resources  of  the  West  is  its  alliance 
with  a  wealthy  and  prosperous  East.  The  wealth  of 
the  East  must  perish  but  for  its  alliance  with  a  wealthy 
and  prosperous  West. 

There  are  wild  utterances,  everywhere.  They  are 
heard  from  Boston  and  New  York  and  Chicago  as  often 
as  from  San  Francisco  or  Denver.  But  they  do  not 
come  chiefly  from  Americans,  and  they  do  not  repre- 
sent the  prevalent  spirit  of  any  American  community. 

The  people  of  the  United  States  are  divided  on  this 
question.  The  two  sides  are,  in  my  judgment,  equally 
honest  and  equally  intelligent.  One  believes  that  the 
policy  of  the  other  leads  to  an  increase  of  the  burden 
of  debt,  to  the  contraction  of  the  world^s  supply  o£ 


174  BILYEB  AND  GOLD. 

currency,  and  to  that  worst  form  of  fluctuation  in  the 
standard  of  value,  the  constant  increase  of  the  pur- 
chasing power  of  money,  with  its  consequent  fall  of 
price  and  strangulation  of  business.  Another  portion 
of  the  people  believe,  with  equal  sincerity,  that  the 
free  use  of  silver,  at  its  old  rate,  by  a  single  nation 
alone  leads  to  the  destruction  of  the  obligation  of  ex- 
isting debts,  the  impossibility  of  any  secure  credit  for 
the  future,  and  turns  all  fixed  business  into  speculation 
and  gambling. 

Each  party  is  equally  honest  and  sincere,  and  the 
two  parties  desire,  in  my  opinion,  the  same  thing — a 
currency  which  shall  be  suflBciently  abundant  for  all 
exchanges,  domestic  and  foreign,  and  a  standard  of 
value  which  shall  be  as  unchangeable  through  the  yeartf 
and  generations  as  the  wit  of  man  can  devise.  The 
proprietors  of  silver  mines  not  unnaturally  desire  tc 
sell  their  product  to  the  best  advantage.  But  I  do  not 
think  they  or  their  advocates  on  this  floor  will  claim 
that  we  shall  adopt  any  policy  with  regard  to  the  cur- 
rency merely  that  they  may  sell  their  product  at  a 
profit.  What  they  would  say,  I  suppose,  is  that,  be- 
lieving as  they  do,  the  disuse  of  silver  for  the  purpose 
of  currency  to  be  attended  by  consequences  disastrous 
not  only  to  the  people  of  this  country,  but  to  all  man- 
kind, the  fact  that  laborers  and  capitalists  who  are  en- 
gaged in  their  special  industries  are  likewise  to  be 
ruined  by  it,  does  not  render  it  any  more  acceptable  to 
them. 

The  great  and  fundamental  difference  between  these 
two  parties  is  the  difference  as  to  two  questions  of  fact. 

First. — Is  the  existing  stock  of  gold  available  for 
currency  sufficient^  with  the  yearly  addition  to  that 


SENATOR  GEOBGE  F.  HOAB.         175 

stock,  to  maintain  prices  at  their  present  level  and 
keep  the  burden  of  debt  from  growing  heavier  year  by- 
year  in  the  future  ? 

If  it  be,  then  the  advocates  of  silver  have  no  right 
to  demand  its  consideration  when  we  are  regulating 
the  currency,  but  must,  like  other  producers,  stand  or 
fall  by  the  general  policies  by  which  we  encourage 
American  industries. 

But  if  it  be  not  sufficient,  if  the  cord  of  indebted- 
ness is  to  tighten  year  by  year  around  the  neck  of  the 
debtor  by  the  rapidly  increasing  value  of  the  gold  dol- 
lar, then  the  advocates  of  bimetallism  are  justified  in  de- 
manding that  every  lawful  resource  of  the  Government 
shall  be  exhausted  and  every  energy  of  the  Americ*\ij 
people  taxed  to  its  utmost  to  prevent  such  a  result. 

Now,  I  can  not  find  that  the  researches  of  our  statis- 
ticians enable  us  as  yet  to  decide  this  question  to  our 
reasonable  satisfaction.  The  tables  which  are  used  by 
the  bimetallists  show  a  constant  increase  in  the  value 
of  gold  since  1878.  As  compared  with  the  forty-five 
principal  commodities  selected  by  Mr.  Sauerbach,  .they 
show  a  constant  increase  in  the  purchasing  power  of 
gold  as  measured  in  those  commodities,  and  show,  on 
the  other  hand,  a  comparatively  small  falling  off  in  the 
value  of  silver.  On  the  other  side,  the  monometallists 
point  out  that  if  you  strike  out  from  the  list  the  arti^ 
cles  whose  production  has  been  greatly  cheapened  by 
increased  labor-saving  appliances,  or  whose  price  in  the 
market  has  been  lessened  by  the  vast  recent  saving  in 
the  cost  of  transportation,  there  has  been  very  little 
fluctuation  in  gold. 

I  can  not  myself  escape  the  apprehension  that  the 
biir^etallists  are  at  least  partially  in  the  right.    It  may 


176  SILVER   AND   GOLD. 

be  that  the  appreciation  of  gold  has  not  jet  taken 
place  to  the  extent  of  their  belief.  But  there  is  a  large 
stock  of  silver  still  in  use  in  the  United  States  and  on 
the  Continent.  What  has  been  done  as  to  India,  and 
what  is  to  be  done  by  us,  have  not  yet  had  an  effect 
which  can  be  measured. 

The  second  question  is  not  so  difficult.  Is  it  possible 
for  the  United  States  to  maintain  a  standard  of  value 
in  separation  or  isolation  from  the  rest  of  the  civilized 
world  ? 

I  have  been,  ever  since  I  was  old  enough  to  have  an 
opinion  on  the  subject,  a  bimetallist.  I  think  that  i3 
true  of  all  the  American  people  down  to  1873,  with  a 
Very  few  exceptions.  But  it  has  been  the  bimetallism 
of  Alexander  Hamilton, '  of  Washington  and  his  Cab- 
inet, of  the  framers  of  the  Constitution,  of  the  mem- 
bers of  the  First  Congress,  and  of  the  Constitution  of 
the  United  States.  It  always  recognized  and  took  for 
granted  that  the  money  standard  of  the  world's  deal- 
ings must  be  settled  by  the  usage  of  commercial  na- 
tions. It  recognized  also  that  if  there  were  a  change 
in  the  relative  value  of  the  two  metals  the  more  valu- 
able metal  must,  in  the  end,  prevail.  I  do  not  under* 
stand  that  there  is  any  purpose  anywhere  to  discard 
the  use  of  silver.  It  is  still,  and  always  must  be,  a 
large  instrument  in  the  commerce  of  daily  life  in  all 
countries.  Even  when  the  use  of  silver  is  directly  con- 
fined to  that  of  subsidiary  coinage,  it  is  not  insignificant 
or  unimportant.  We  have  about  $50,000,000  of  sub- 
sidiary coinage,  but  every  dime  of  that  coinage  passes 
from  hand  to  hand  a  hundred  times  where  the  gold 
dollar  would  so  pass  once. 

The  lesson  of  all  experience  points  to  the  use  of  gold 


8ENAT0B  6E0BGB  F.  HOAB.         177 

and  silver  to  e£Fect  exchanges  and  to  measure  yalues 
for  the  commerce  of  mankind.  From  the  foundation 
of  the  world  they  have  performed  this  great  office. 
They  are  known  as  the  precious  metals  in  the  universal 
language  of  civilized  men.  They  are  adapted  and  they 
alone  are  adapted,  by  permanence,  by  their  capacity 
for  being  coined  and  stamped,  for  the  convenience  with 
which  they  may  be  kept  and  transported,  to  perform 
this  service  for  mankind.  They  are  the  only  comple- 
ments of  each  other.  If  the  weight  and  size  of  silver, 
in  proportion  to  its  value,  be  too  great  for  use  in  large 
transactions,  the  size  of  gold,  in  proportion  to  its  value, 
is  too  small  for  safety  and  convenience  in  the  smaller 
and  commoner  transactions  of  life. 

Silver  circulates  everywhere  to-day,  and  will  circu- 
late everywhere  until  time  shi  11  be  no  more,  as  the 
money  of  the  common  people,  whatever  may  be  the  ac- 
tion of  the  government. 

In  the  countries  where  gold  is  the  only  recognized  . 
lawful  standard. of  value,  silver  is  still  the  instrument 
of  the  commerce  of  man's  daily  life.  Sometimes  one 
has  risen  for  a  few  years,  perhaps  for  a  generation,  in 
value  as  compared  with  its  companion,  and  sometimes 
the  other.  Sometimes  mistaken  financial  policies,  some- 
times popular  excitement,  sometimes  the  schemes  of 
designing  speculators,  may  have  depreciated  or  exalted 
one  at  the  expense  of  the  other.  But  this  august  and 
regal  pair — the  queenly  silver  and  the  royal  gold — 
have  maintained  throughout  all  ages,  and  through  all 
time  will  maintain  their  companionship  and  their  su- 
premacy. If  you  undertake  to  settle  this  question  by 
driving  either  from  the  country,  you  will  have  no  peace 
until  it  is  restored.     The  principle  which  recognizes 


178  SILVBB  AND  GOLD. 

both  has  ite  foundation  in  nature,  and  in  the  experience 
of  man. 

That  the  words  "  money  "  and  "  gold  and  silver  " 
were  regarded  as  equivalents  in  constitutional  meaning 
is  shown  by  the  fact  that  the  Constitution  makes  a  sep- 
arate provision  as  to  bills  of  credit  and  does  not  in- 
clude them  in  the  sentence  which  applies  te  money.  It 
is  not  gold  or  silver  that  a  State  may  make  a  legal 
tender,  but  gold  and  silver,  the  legal  value  of  which, 
by  another  clause  of  the  Constitution,  is  to  be  deter- 
mined by  Congress. 

Chief  Justice  Ellsworth  and  his  associate,  who  rep- 
resented Connecticut  in  the  constitutional  convention, 
in  their  report  to  their  constituents  of  the  proceedings 
of  the  convention,  say  that  the  new  Constitution  pro- 
vides that  no  State  ^^  shall  make  anything  but  money  a 
legal  tender  for  the  payment  of  debts,"  showing  that, 
in  their  judgment,  the  word  "money"  and  the  words 
"gold  and  silver  "  are  identical  or  equivalents. 

Alexander  Hamilton  considered  this  question  in  his 
great  report  on  the  mint  and  the  coinage.  He  gave 
fullest  weight  to  the  arguments  of  the  monometallists. 
He  admitted  that  the  money  unit  had  up  to  that  time 
virtually  attached  to  gold  rather  than  to  silver.  But 
with  the  fullest  concurrence  of  President  Washington 
and  the  statesmen  of  his  time,  he  declared  for  the  prin- 
ciple of  bimetallism.  His  arguments  have  not  lost 
their  original  force.  They  have  not  been  answered  in 
any  discussion.  The  people  of  the  United  States, 
when  the  tempest  has  passed,  will  settle  down  and  be 
reconciled  to  the  solution  of  this  great  problem  in 
which  Washington  and  his  Cabinet  joined.  They 
never  will  be  permanently  reconciled  to  any  other. 


8EKAT0B  GEOBGE  F.  HOAB.         17P 

Daniel  Webster  declared  more  than  once,  and  with 
great  emphasis,  that  the  Constitution  requires  the  coin- 
age of  both  metals;  and  it  would  be  a  disobedience 
to  our  constitutional  duty  were  congress  to  discard 
either. 

All  our  great  fiuancial  authorities  of  both  parties, 
from  the  framers  of  the  Constitution,  from  Alexander 
Hamilton,  and  Jefferson,  and  Webster,  and  Calhoun, 
and  Benton,  and  Chase,  and  Fessenden,  Federalists  and 
Republicans,  Whigs  and  Democrats,  down  to  the  dis- 
turbed period  which  followed  the  war,  have  agreed 
upon  this  policy.  There  were  differences  which  divided 
political  parties.  Whether  congress  should  authorize  a 
paper  currency,  under  careful  safeguards,  redeemable 
in  coin,  or  should  leave  that  to  State  discretion,  or  to 
private  enterprise,  was  a  question  which  divided  parties 
and  made  and  unmade  presidents  and  administrations. 
But  down  to  the  year  1863  it  never  was  heard  in  this 
country  that  the  legal  tender  and  the  standard  of  value 
should  be  anything  but  gold  and  silver ;  nor  was  it  ever 
claimed  until  1873  that  both  gold  and  ^^Iver  could  not 
be  relied  upon  to  perform  this  service. 

I  have  no  doubt  that  the  Committee  oi>  Coinage,  who 
reported  and  enacted  the  statute  of  1878,  sv^re  actuated 
solely  by  a  conscientious  desire  for  the  public  good.  I 
would  give  no  countenance  to  the  miserabU^  slander 
that  they  were  acting  in  the  interest  of  capiulists  or 
monopolists  or  of  creditors ;  or  that  they  desireii  to  con- 
ceal what  they  were  doing  from  the  American  yreople, 
or  from  anybody.  They  selected  for  their  single  >^tand- 
ard  what  was  then  the  cheaper  metal,  a  metal  not  •')nly 
then  the  cheaper,  but  of  which  a  large  and  constantly 
increasing    supply    was    confidently    expected.     P'Ni 


180  SILVER   AND   GOLD. 

Bcheme  was  proposed  in  the  report  of  the  Director  of 
the  Mint^  was  recommended  by  the  Secretary  of  the 
Treasury  in  his  report,  was  printed  in  the  House  of 
Representatives  thirteen  times;  was  called  to  the  atten- 
tion of  chambers  of  commerce,  was  the  subject  of  de- 
liberate discussion  in  some  of  them,  and  was  well 
known  to  leading  financiers. 

The  senate  first  voted  to  request  the  president  to 
open  a  correspondence  with  other  countries  in  relation 
to  the  unit  of  value.  That  correspondence  took  place. 
Then  the  Director  of  the  Mint  proposed,  in  his  report, 
to  adopt  a  single  gold  standard.  Then  the  Secretary 
of  the  Treasury  urged  the  measure  in  his  report  to  con- 
gress. Then  the  matter  was  referred  by  Mr.  Hooper  of 
the  house,  to  public  bodies  for  their  opinions. 

Mr.  Ernest  Seyd  was  an  authority  on  all  practical 
mechanical  measures  connected  with  coin.  Mr.  Hooper 
wrote  to  England  asking  his  assistance  in  the  matter. 
Mr.  Seyd  wrote  him  quite  a  long  letter  early  in  the 
year  1872,  and  he  then  came  here.  I  have  his  letter  to 
Mr.  Hooper,  making  the  final  discussion  upon  the  bill 
which  Mr.  Hooper  submitted  ;  and  after  suggesting  in 
that  letter  various  practical  reforms,  which  are  of  little 
or  no  importance  in  this  connection,  Mr.  Seyd  goes  on 
with  an  able  and  elaborate  argument  against  monomet- 
allism, and  says  the  great  fault  he  finds  with  Hooper's 
bill  is  that  he  undertakes  to  bring  this  country  to  the 
gold  standard,  which  he  thinks  would  be  destructive, 
and  against  which  he  had  written  a  book  at  home ;  and 
he  urges  upon  him  the  free  coinage  of  silver  at  the  rate 
of  400  grains  to  the  dollar.  Mr.  Seyd  wrote  it  to  Mr, 
Hooper  after  the  bill  was  framed,  most  earnestly  and 
laboriously  urging  him  not  to  adopt  monometallism  and 


^      or  TUX  T^" 


JOHN  P.  JONES, 


8EKATOB  6EOBGB  F.  HOAB,         188 

recommending  that  the  standard  of  silver  be  100  grains 
iustead  of  415. 

We  were  not  having  specie  at  all  and  had  not  any 
specie  circulation  for  three  or  four  years  after  that 
time,  and  in  1878  in  came  the  Bland  act  restoring  silver 
and  providing  for  a  larger  coinage  of  silver  every  year 
than  we  had  had  before  in  the  whole  seventy-three 
fears  of  the  century  put  together. 

Now,  to  return,  both  the  great  political  parties  in 
this  country  were  of  this  way  of  thinking  down  to  the 
last  national  election. 

But  the  great  question,  of  course,  is  the  question  of 
ratio.  Here,  too,  we  must  follow — whoever  may  be 
disappointed  and  whatever  the  cost — 

First,  the  principle  laid  down  by  our  earlier  authori- 
ties ; 

Second,  the  precedents  of  our  legislation. 

Alexander  Hamilton  declared  that  if  the  two  metals, 
at  any  time,  were  separated,  the  more  valuable  metal 
must  be  the  standard  for  the  reason  that  the  fluctua- 
tions would  be  the  more  likely  to  attach  to  the  inferior 
metal.  No  respectable  American  authority,  until  the 
recent  discussions,  can  be  found  to  the  contrary.  We 
can  not  establish  a  contrary  policy  to-day  without  en^ 
tailing  upon  the  country  infinite  mischief,  and  disre- 
garding the  opinion  of  the  whole  commercial  world  and 
without  a  separation  from  all  the  leading  nations  of  the 
world  in  this  matter  of  the  standard.  I  hold  tliat  this 
is  a  thing  almost  as  impossible  as  attempting  to  exempt 
our  portion  of  the  planet  from  the  operation  of  the  law 
of  gravitation  itself. 

Everything  points  to  an  Ciilargement  of  intercourse 
and  to  closer  relation  in  the  future.  The  ocean  voyage 
11 


184  SILYEB  AND  GOLD. 

between  the  two  hemisphereB  has  been  reduced  from  an 
average  of  thirty  days  to  less  than  six  days,  and  the  time 
is  at  hand,  in  the  opinion  of  the  best  naval  architects, 
when  ocean  lines  will  make  their  ordinary  voyage 
within  a  hundred  hours.  One-half  of  the  population 
of  the  United  States  are  within  speaking  distance  of 
Washington  by  telephone.  The  time  is  undoubtedly 
at  hand  when  the  Atlantic  will  be  no  impediment  to 
audible  communication  between  the  two  continents. 

Besides,  the  precedents  of  our  own  legislation,  down 
to  the  time  when  the  opinion  of  this  country  was 
divided  upon  this  question,  all  point  to  the  same  result. 
If  silver  were  queen,  gold  was  king. 

There  is  nothing  which  points  to  any  considerable 
rise  in  silver  in  the  near  future,  unless  there  may  be 
some  brief  and  temporary  diminution  of  the  product. 
If  it  come,  however  difficult,  there  must  be  a  new  re- 
vision of  the  relatiop  between  the  two  metals.  That 
can  only  take  place  by  the  common  consent  of  com- 
mercial nations,  and  it  will  be  idle  and  hopeless  to  ex- 
pect it  otherwise. 

Believing,  therefore,  with  Hamilton,  that  the  bime- 
tallic standard  is  that  upon  \riiich  alone  this  country 
can  permanently  and  safely  rest,  and  believing  also, 
with  Hamilton,  that  whenever  the  two  metals  separate 
the  standard  must  be  conformed  to  the  more  valuable, 
I  am  in  favor  of  at  once  putting  a  stop  to  the  purchase 
of  silver  for  coinage.  Otherwise  it  seems  to  me  clear 
that  our  gold  will  take  its  departure,  and  we  shall  be 
left  in  that  most  wretched  of  conditions,  a  nation 
with  a  single  monometallic  standard  composed  of  an 
inferior  metal,  constantly  fluctuating  and  rapidly  de- 
generating— a    condition    from  which  every  wealthy 


8ENAT0B  GBOBGB  F.  HOAB.         186 

commercial  nation  in  the  world,  now  including  India, 
has  escaped. 

Another  course  may  be  suggested  which  might,  under 
circumstances  different  from  those  which  now  surround 
us,  prove  practicable  and  desirable.  That  is,  to  coin  a 
legal  tender  silver  dollar  of  a  weight  sufBcient  to  make 
it  equal  in  value  to  the  gold  dollar ;  make  the  gold  and 
silver  dollars  receivable  for  all  debis^  public  and  pri- 
vate; make  them  interchangeable  at  the  treasury  at 
the  will  of  the  holder;  pledge  the  credii  of  the  gov- 
ernment to  maintain  this  relation,  and  provide  that  if 
at  anytime  the  bullion  value  of  the  silver  dollar  should 
fall  to  a  point  more  than  2  or  8  per  cent,  below  the 
gold  dollar  the  coinage  of  silver  shall  cease  until  the 
ratio  be  restored.  This  plan  will  go  far  to  answer  the 
arguments  of  those  persons  who  think  the  stock  of 
gold  in  the  world  insufficient  to  supply  the  world's  need 
of  a  currency  and  dread  falling  prices,  increased  bur- 
den of  debts,  and  strangulated  business.  But  I  fear 
we  can  not  adopt  it  now 

First,  it  would  not  be  accepted  by  the  special  repre- 
sentatives of  the  producers  of  silver,  without  whose 
concurrence  it  can  not  be  adopted. 

But,  second  and  chiefly,  because  we  have  on  oxxi 
bauds  four  hundred  and  twenty  million  of  standard 
silver  dollars  of  which  three  hundred  and  eighty  mil. 
lion  are  in  circulation,  either  as  coin  or  by  the  certifi- 
cates which  represent  them,  not  now  taking  into  ac- 
count upward  of  fifty  million  of  subsidiary  coin.  If 
this  policy  were  to  be  adopted  now,  we  must  either  at- 
tempt to  maintain,  side  by  side,  two  standard  silver 
dollars  of  different  weight  or  we  must  call  in  and  re* 
coin  our  existing  silver  currency  at  a  cost  to  the  treas- 


186  SILVEK  AND  GOLD. 

ury  of  a  sum  which  might  not  improbably  equal  60  per 
cent,  of  the  entire  value  of  our  silver  coinage.  We 
must,  therefore,  abandon  for  the  time  being  an  attempt 
to  make  our  present  silver  product  useful  for  currency 
and  remit  that  question  to  the  future.  It  will  be  all 
we  can  do  to  support  our  present  stock  of  silver  coin 
without  depreciation. 

No  man  can  regret  more  than  I  do  any  temporary 
distress  which  may  fall  upon  those  young  communities 
wliich  have  lately  taken  their  places  in  the  sisterhood 
of  American  States.  I  would  go,  as  I  have  heretofore 
gone,  to  the  very  limit  of  public  safety,  in  my  regard 
for  their  special  condition.  But  they  must  not  expect 
— 1  do  not  believe  that  their  representatives  here  will 
seriously  claim — that  we  should  be  affected,  in  regula- 
ting the  currency,  by  a  desire  to  promote  the  sale  of  a 
particular  product. 

I  do  not  think  such  a  policy  would,  in  the  end,  be  of 
advantage  to  the  silver-producing  States  themselves.  I 
believe  that  if  this  country  should  be  put  on  what  is 
called  a  silver  basis,  and  our  home  supply  of  coinage 
could  be  furnished  by  Colorado  and  the  other  silver 
States — I  believe  if  the  whole  world  could  be  put  on 
a  silver  basis,  and  these  silver  States  could  furnish  all 
the  silver,  it  would  be  an  unmixed  evil  to  them.  No 
nation,  no  State  ever  got  permanent  strength  or  pros- 
perity from  its  wealth  of  the  precious  metals.  There  al- 
ways has  been,  and  there  always  will  be,  an  element  of 
chance,  not  to  say  gambling,  in  that  product.  Spain 
and  Mexico  and  Peru  tell  their  own  story.  The  true 
prosperity  of  California  began  when  the  great  profits 
of  her  yield  of  gold  ceased  and  other  industries  ap- 
peared.   I  was  specially  gratified  by  the  note  of  cour- 


'^ 


aElTATOR  ^EOUGE  F.   HOAB.      I  '*"    '   *18T 


'     V    -r 


age  in  an  utterance  attributed  to  the  senior  Senator' 
from  Colorado,  in  which  he  told  his  people  not  to  be 
down-hearted — they  could  be  a  powerful  State  with- 
out silver.  I  am  not  sure  that  it  would  not  have 
been  better,  both  for  Nevada  and  for  the  country,  if 
there  were  not  a  mine  within  her  borders. 

I  am  told  that  Colorado  produced  in  1892,  fifty-five 
millions  of  coal,  sixty  millions  of  farm  products,  thirty- 
four  millions'  worth  of  cattle,  and  that  her  manufac- 
tures were  seventy-five  millions,  while  her  silver  prod- 
uct was  about  twenty-three  millions.  Two  hundred 
and  twenty-four  millions  of  these  products,  the  demand 
for  which  no  legislation  can  affect,  is  a  pretty  good 
showing  for  a  State  not  yet  twenty  years  old.  Of  the 
wealth  she  produces  even  now,  her  silver  product  is  not 
a  tenth. 

I  do  not  think  we  shall  gain  mucTi  by  discussing  here 
the  responsibility  for  the  condition  of  thiugs  that  exist 
in  this  country.  It  is  our  duty  to  agree,  if  we  can, 
upon  a  remedy.  We  shall  probably,  all  of  us,  have 
something  to  say  to  the  people  when  they  are  asked  to 
determine  to  what  leaders  they  shall  give  their  confi- 
dence hereafter.  But  I  voted,  after  the  best  considera- 
tion of  the  subject  of  which  I  was  capable,  for  the 
much-abused  statute  of  1890.  I  have  seen  no  reason 
to  change  my  opinion  of  the  wisdom  of  that  vote  in  the 
light  of  subsequent  experience.  That  law  has  been 
most  bitterly  attacked.  I  desire  to  leave  on  record 
somewhere,  and  the  records  of  the  senate  seem  to 
me  the  fittest  place,  the  reason  which  governed  my 
action. 

The  law  of  February  28, 1878,  commonly  known  as 
the  Bland  bill,  as  it  passed  the  house  of  representatives, 


18S  8lLr&lt  AKb  QOth. 

provided  for  the  free  coinage  of  silver  without  limits  at 
the  rate  of  412^  grains  to  the  dollar.  The  owner  of 
the  silver  bullion,  under  the  operation  of  that  bill  as  it 
passed  the  house,  could  have  taken  it  to  the  mint  and 
received  a  legal  tender  dollar,  coined  and  stamped,  for 
every  412^  grains  of  silver.  This  not  only  would  have 
enabled  the  owner  of  the  silver  to  make  a  large  profit, 
as  the  process  of  its  degeneration  went  on,  but  it  would 
have  been  an  issue  of  fiat  money,  pure  and  simple,  so 
far  as  the  difference  went  between  the  bullion  value  of 
the  silver  dollar  and  of  the  gold  dollar. 

The  senate  amended  the  house  bill  by  limiting  the 
amount  to  be  purchased  to  a  sum  which  was  not  to  be 
less  than  two  million  and  not  more  than  four  million 
dollars'  worth  a  month,  at  the  discretion  of  the  secre- 
tary. The  secretary  was  to  purchase  the  bullion  at  its 
market  value  and  coin  from  it  all  the  412^-grain  dollars 
it  would  make.  The  bill  so  amended  passed  both 
houses  over  the  veto  of  President  Hayes.  But  the  fiat 
money  remained,  and  for  twelve  years  had  been  accu- 
mulating in  the  treasury. 

For  that  issue  of  fiat  money  the  act  of  1890  substi- 
tuted the  purchase  of  silver  at  the  rate  of  4,500,000 
ounces  a  month.  But  it  declared  it  the  duty  of  the 
Secretary  of  the  Treasury  to  maintain  its  parity  with 
gold,  to  do  which  it  would  become  his  dutyto  use  all 
the  powers  committed  to  him  by  the  resumption  act  of 
1876. 

In  other  words,  instead  of  the  fiat  money  of  the  Bland 
bill,  every  dollar  of  the  property  and  the  utmost  limit 
of  the  credit  of  the  people  of  this  country  were  pledged 
to  the  maintenance  of  our  silver  currency  on  an  equal* 
Hy  with  gold^ 


d^KAtOR   GBOtt^B   F.    HOAR.  18^ 

It  is  true  that  the  amount  of  silver  to  be  purchased 
was  increased  by  the  act  of  1890  from  the  limit  of  from 
two  to  four  million  dollars'  worth  a  month — ^at  the  dis- 
cretion of  the  Secretary  of  the  Treasury — to  a  fixed 
amount  of  4,500,000  ounces  a  month,  without  discre- 
tion ;  to  be  purchased,  however,  at  its  market  value,  so 
that  the  profit  of  the  transaction  inured  to  the  treasury* 

It  is  true  also  that  since  the  Bland  bill  was  enacted 
but  two  millions'  worth  a  month  had  been  in  fact  pur- 
chased. But  that  condition  of  things  could  only  con- 
tinue so  long  as  there  should  be  a  Republican  Secretary 
of  the  Treasury,  or  a  Democratic  Secretary  differing 
wholly  from  his  party.  In  the  not  unlikely  accession 
of  the  Democratic  party  to  power  we  had  every  reason 
to  expect  that  silver  would  be  purchased  to  the  largest 
monthly  limit  permitted  by  law. 

This  was  nof  only  the  opinion  of  Democrats  who 
might  be  termed  extremists,  but  of  the  leaders  of  the 
party  iu  congress,  with  perhaps,  half  a  dozen  excep- 
tions. Certainly  no  man  represented,  then  or  now, 
what  would  be  called  the  moderate  and  conservative 
opinion  of  his  political  associates  more  than  the  pres- 
ent Secretary  of  the  Treasury.  He  had,  and  deserved, 
their  full  confidence,  and  he  had  and  deserved  the 
friendly  regard  of  all  who  have  been  his  associates  in 
the  public  service.  If  the  personal  inclination  of  his 
party  had  been  followed,  without  considerations  of 
special  availability  in  one  or  two  States,  he  would  have 
been  preferred  to  Mr.  Cleveland  as  a  candidate  for  the 
Presidency  itself.  It  was  natural  and  almost  inevitable 
that,  in  the  case  of  Democratic  success,  Mr.  Carlisle 
should  be  called  to  the  treasury,  and  should  be  clothed 
^ith  the  discretion  given  by  the  Bland  bill. 


190  SILVER   AND  GOLD. 

Now  Mr.  Carlisle  had  voted  for  the  free  coinage  of 
silver,  of  which  he  was  an  avowed  advocate,  although 
he  desired  that  the  profit  should  go  to  the  government 
and  not  to  the  owner  of  the  bullion.  In  his  very  able 
speech  in  favor  of  the  Bland  bill,  as  it  finally  passed 
the  house,  delivered  in  the  house  of  representatives 
February  21,  1878,  he  gives  his  opinion  on  this  subject, 
and  especially  his  opinion  as  to  the  proper  exercise  of 
this  discretion  by  the  Secretary  of  the  Treasury.  He 
says : 

^^  My  position  upon  the  subject  is  briefly  this :  I  am 
opposed  to  free  coinage  of  either  gold  or  silver,  but  in 
favor  of  unlimited  coinage  of  both  metals  upon  terms  of 
exact  equality.  No  discrimination  should  be  made  in 
favor  of  one  metal  and  against  the  other;  nor  should 
any  discrimination  be  made  in  favor  of  the  holders  of 
either  gold  or  silver  bullion  and  against  the  great  body 
of  the  people  who  own  other  kinds  of  property." 

He  goes  on  to  denounce  Mr.  Sherman,  then  Secre- 
tary of  the  Treasury,  as  well  known  to  be  hostile  to  the 
purposes  of  the  Bland  bill,  and  to  denounce  the  resump- 
tion act  of  1875  as  a  destructive  scheme.    He  says : 

^*  The  senate  has  declared  by  a  large  vote  that  the 
coinage  should  be  limited  to  a  sum  not  less  than  $2,- 
000,000  per  month.  If  the  execution  of  this  measure 
could  be  intrusted  to  a  public  ofiQcer  whose  opinions 
upon  the  subject  were  in  accord  with  those  of  the 
great  majority  of  the  American  people,  and  whose  sym- 
pathies were  with  the  struggling  masses  who  produce 
the  wealth  and  pay  the  taxes  of  the  country,  rather 
than  with  the  idle  holders  of  idle  capital,  the  provis- 
ions alluded  to  would  be  of  little  consequence,  because 
he  would  coin  the  maximum  instead  of  the  minimum 
amount  allowed  by  the  amendment." 


SENATOR   GEORGE  F.   HOAB.  191 

Le«;  me  not  be  understood  for  a  moment  as  desiring 
to  cast  any  imputation  either  upon  the  integrity  or  the 
wisdom  of  the  present  Secretary  of  the  Treasury.  I 
suppose  that  he  has  changed  his  opinion  as  to  what 
would  be  a  wise  exercise  of  his  discretion  under  the 
Bland  bill,  even  if  he  were  vested  with  it.  But  I  sup- 
pose that,  in  common  with  a  large  number  of  his  coun- 
trymen, his  change  of  opinion  has  been  brought  about 
naturally  and  honestly,  as  well  as  inevitably,  by  a 
change  of  situation.  The  argument  which  might  have 
convinced  as  honest  a  public  officer  as  Mr.  Carlisle  in 
1878,  appears  very  differently  in  1893.  In  1878  all 
parties  in  the  United  States  expected  to  continue  the 
coinage  of  silver.  The  question  was  whether  it  should 
be  limited  or  unlimited.  There  was  no  reason  to  doubt 
that  if  the  consent^ of  Great  Britain  could  be  had, 
every  other  European  government  would  gladly  open 
its  mints  again  to  silver.  Many  great  and  conservative 
British  financiers  then  thought  that  the  way  to  protect 
India  was  not  to  put  her  on  a  gold  basis,  but  that  En- 
gland herself  should  resume  the  coinage  of  silver  at  a 
proper  ratio. 

It  is  no  secret  that  some  ot  che  cabinet  of  Lord  Salis- 
bury and  that  Mr.  Goschen  himself  inclined  to  this 
view  and  were  ready  to  adopt  it  as  the  policy  of  the 
government,  if  the  consent  of  the  business  men  of 
London,  with  anything  near  unanimity,  could  have 
been  had*  This  opinion  has  within  a  few  days  been 
reaffirmed  by  Mr.  Balfour.  I  have  never  agreed  with 
the  opinions  expressed  in  favor  of  the  free  coinage  of 
silver  by  Mr.  Carlisle,  and  those  who  then  thought 
with  him  ;  but  justice  to  them  requires  it  to  be  admitted 
that  the  question  was  a  very  different  one  when  the 


Id2  SILVER   AND   GOLft. 

policy  of  the  commercial  world,  outside  of  this  oonnttjr^ 
was  still  undecided,  from  what  it  is  now  when  that  pol- 
icy is  settled. 

This  then  was  the  condition  of  things  under  the  bill 
for  which  the  Sherman  bill  was  a  substitute.  The 
Bland  bill  of  1878  required  the  addition  to  our  silver 
coinage  of  $2,000,000  worth  a  month,  not  redeemable 
in  gold,  and  legal  tender  for  all  obligations,  public  or 
private.  The  Secretary  of  the  Treasury  was  bound  to 
the  purchase  of  at  least  $2,000,000  worth  a  month,  and 
to  coin  from  it  all  the  dollars  it  would  make.  But  he 
was  at  liberty  in  his  discretion  to  purchase  and  coin 
$4,000,000  worth  a  month. 

If  we  had  a  secretary  entertaining  the  then  opinion 
of  Mr.  Carlisle,  who  favored  and  voted  for  free  coin- 
age of  silver,  and  who  favored  the  passage  of  the  Bland 
bill  over  the  veto  of  President  Hayes,  we  were  to  have 
$4,000,000  worth  a  month,  of  $48,000,000  worth  a  year. 
Now  this,  so  far  as  the  difference  between  gold  and 
silver  was  concerned,  was  fiat  money  pure  and  simple. 

What  would  have  come  if  this  law  had  been  contin- 
ued? If  we  had  had  a  Democratic  Administration — if 
that  administration  represented  the  opinion  of  nine- 
tenths  of  the  Democratic  party — ^we  were  to  have 
forty-eight  million  dollars'  worth  of  fiat  money  a  year. 
To  what  condition  would  this  have  brought  us,  inevi- 
^bly  and  swiftly,  even  if  the  smaller  quantity  alone 
were  coined  ?  I  will  let  Mr.  Cleveland  himself  answer 
this  question. 

He  declares  in  his  message,  December  8, 1885 : 

*^This  operation  will  result  in  the  substitution  of  silver 
for  all  the  gold  the  government  owns  applicable  to  its 
general  purposes ; '' 


SENATOR  6EORGE  F.   HOAlt.  ^98 

That  the— 

"  hoarding  of  gold  has  already  begun ;  '* 

That— 

*'  the  two  coins  will  part  company ;  *  *  *  then  will 
be  apparent  the  di£Ference  between  the  real  value  of  the 
silver  dollar  and  a  dollar  in  gold ;  *  *  *  gold»  still 
the  standard  of  value,  and  necessary  in  our  dealings 
with  other  countries,  will  be  at  a  premium  over  silver ; 

*  *  *  rich  speculators  will  sell  their  hoarded  gold 
to  their  neighbors  who  need  it  to  liquidate  their  foreign 
debts,  at  a  ruinous  premium  over  silver,  and  the  labor- 
ing men  and  women  of  the  laud,  most  defenseless  of  all, 
will  find  that  the  dollar  received  for  the  wage  of  their 
toil  has  shrunk  in  its  purchasing  power. 

**  That  disaster  has  not  already  overtaken  us  furnishes 
no  proof  that  danger  does  not  wait  upon  a  continuation 
of  the  present  silver  coinage.  We  have  been  saved  by 
the  most  careful  management  and  unusual  expedients, 
by  a  combination  of  fortunate  conditions,  and  by  a  con- 
fident expectation  that  the  course  of  the  government 
in  regard  to  silver  coinage  would  be  speedily  changed 
by  the  action  of  congress. 

In  his  letter  to  A.  J.  Warner  and  others,  members  of 
the  Forty-Eighth  Congress,  February  24,  1885,  Mr. 
Cleveland  says : 

"Gold  would  be  withdrawn  to  its  hoarding  places,  and 
an  unprecedented  contraction  in  the  actual  volume  of 
our  currency  would  speedily  take  place.  Saddest  of 
all,  in  every  workshop,  mill,  factory,  store,  and  on 
every  railroad  and  farm,  the  wages  of  labor,  already  de- 
pressed, would  suffer  still  further  depression  by  a  scal- 
ing down  of  the  purchasing  power  of  every  so-called 
dollar  paid  into  the  hand  of  toil.  From  these  impend- 
ing calamities  it  is  surely  a  most  patriotic  and  grateful 
duty  of  the  representatives  of  the  people  to  deliver 
them/' 


194  SILVFJt  AND  GOLD. 

The  representatives  of  the  people  did  deliver  them. 
With  no  help  from  Mr.  Cleveland  or  his  political  sup- 
porters, the  Republican,  party  arrested  the  swift  prog^ 
ress  of  the  danger  which  threatened  us,  and  removed 
a  large  part,  though  not  the  whole,  of  the  evil  of  the 
Bland  bill.  The  act  of  July  14,  1890,  while  it  for  a 
short  time  increased  the  amount  of  silver  which  the 
Secretary  of  the  Treasury  might  purchase  and  coin,  de- 
clared the  ^^  established  policy  of  the  United  States  to 
maintain  the  two  metals  at  a  parity  with  each  other.*' 

By  the  statute  approved  January  14,  1875,  the  act 
to  provide  for  the  resumption  of  specie  payments,  the 
Secretary  of  the  Treasury  is  authorized  to  use  any  sur- 
plus revenues  not  otherwise  appropriated,  and  to  issue, 
sell,  and  dispose  of,  at  not  less  than  par,  any  bonds  of 
the  United  States  described  in  the  act  of  congress  of 
July  14, 1870.  Those  bonds  were  :  A  bond  bearing  4 
per  cent,  interest,  running  for  thirty  years;  a  bond 
bearing  4|  per  cent,  interest,  running  fifteen  years ;  a 
bond  bearing  5  per  cent,  interests,  running  ten  years. 

So  that  the  act  of  1890  substituted  for  the  issue  of 
twenty-four  million  gold  dollars'  worth  of  fiat-silver 
mone}'^  yearly  the  present  purchase  of  silver,  with  the 
wliole  faith  and  resources  of  the  government  pledged 
to  maintain  its  equality  with  gold. 

It  is  said  that  we  had  in  the  treasury  June  80,  1898, 
$362,000,000  of  silver  in  coin  and  $118,000,000  in  bars ; 
and  this  is  true.  But  of  this  four  hundred  and  eighty 
millions,  three  hundred  and  forty  millions,  or  there 
abouts,  is  in  practical  circulation  in  the  form  of  silvei 
certificates. 

We  had,  at  the  same  time,  in  the  treasury,  $110,- 
000,000  of  gold  in  coin,  and  seventy-eight  miUions  in 


8BNAT0B  GEORGE  F.  HOAR.         195 

t>ar^.  Of  this  one  hundred  and  eighty-eight  millions, 
ninety-four  millions^  or  about  50  per  cent,  was  in 
practical  circulation  iu  the  form  of  gold  certificates. 

While  the  gold  certificates  in  circulation  amount  to 
only  one-half  or  thereabouts  of  the  gold  in  the  treasury, 
the  silver  certificates  in  circulation  are  about  two* 
thirds  of  the  silver  in  the  treasury.  We  have  one  hun- 
dred and  fifty  millions  of  silver  certificates  in  circula- 
tion against  ninety-four  millions  in  circulation  of  gold 
certificates. 

I  suppose  it  will  not  be  claimed  that»  so  far  as  the 
silver  is  in  practical  circulation,  the  most  convenient 
form  of  that  circulation  is  not  the  deposit  of  the  bullion, 
or  coil),  in  the  treasury,  and  the  transfer  from  hand  to 
hand  of  its  paper  representative.  I  suppose  that  if  all 
the  silver  now  in  the  treasury  should  be  replaced  by  an 
equal  value  in  gold  dollars,  and  the  silver  destroyed  or 
sent  out  of  the  country,  as  large  a  proportion  of  the 
.gold  as  the  amount  of  the  silver  certificates  bear  to  the 
entire  mass  of  silver  would  circulate  in  the  form  of 
gold  certificates. 

Under  the  statute  of  the  l/nited  States,  which  dif- 
fers in  that  respect  from  that  of  some  States,  the  re- 
peal of  an  act  which  itself  repeals  a  former  act  does  not 
revive  such  former  act*  So  in  voting  to  repeal  the  act 
of  1890,  or  any  part  of  it,  we  do  not  revive  the  legisla- 
tion from  which  Mr.  Cleveland  anticipated  such  mis- 
chievous consequences  in  the  near  future.  Were  the 
Bland  bill  now  to  be  revived  I,  for  one,  should  not  con- 
sent to  repeal  the  law  of  1890,  and  to  vest  in  Mr.  Car- 
lisle the  discretion  which  he  is  so  solemnly  pledged  to 
exercise,  of  purchasing  silver  and  issuing  fiat  dollars 
of  412^  grains  at  the  rate  of  4,000,000  gold  dollars* 


196  SILTEB  AKD  GOLD. 

worth,  or  at  present  rate  7,871,428  silver  dollars  a 
month. 

This  discretion,  it  will  be  remembered,  was  vested 
by  law  wholly  in  the  secretary  and  is  beyond  the  con- 
trol of  the  president  himself. 

One  party,  the  Democratic  party,  almost  unanimously 
— aided  by  Republicans  enough  to  make  a  majority  of 
both  houses  of  congress — were  well  known  to  be  in 
favor  of  the  free,  unlimited  coinage  of  silver  at  the 
rate  of  412J  grains  to  the  dollar.  There  were  a  few  ex- 
ceptions in  the  Democratic  party.  But  that  the  friendsi 
of  free  coinage  of  silver  represented  its  settled  opinion 
and  its  deliberate  purpose  is  shown  by  the  fact  that  at 
its  advent  to  power  the  Secretary  of  the  Treasury  and 
every  Democratic  member  of  the  committee  on  finance 
of  the  senate,  with  a  single  exception,  is  a  person  wh( 
was  then  of  that  way  of  thinking. 

Now  it  is  notorious — ^no  honest  man  who  remember*, 
the  history  of  that  time  will  deny — that  the  alternative 
presented  to  us  was  the  passage  through  both  houses  o( 
congress  of  a  bill  for  the  free  coinage  of  silver  or  the 
adoption  of  the  measure  of  1890 — a  measure  far  better 
than  the  existing  law  which  it  repealed,  on  the  one 
hand,  and  infinitely  better  than  the  new  law  with  which 
we  were  menaced,  on  the  other.  It  is  true  that  Presi- 
dent Harrison  undoubtedly  would  have  vetoed  a  bill 
for  the  free  coinage  of  silver.  But  it  is  also  true  that 
the  passage  of  such  a  measure  through  both  houses  of 
congress — arrested  only  by  the  opinion  of  the  executive 
— ^would  have  caused  infinite  mischief  in  its  effect  upon 
the  public  credit,  both  abroad  and  at  home. 

Now,  you  tell  us  that  the  main  cause^  of  the  present 
difficulty  is  that  foreigners  will  not  keep  our  securities 


8ENAT0B  GEORGE  F.  HOAB.         197 

80  loDg  as  they  are  afraid  thej  will  be  paid  in  depreci- 
ated silver,  although  the  whole  credit  of  the  govern- 
ment of  the  United  States  is  pledged  to  make  every 
silver  coin  as  good  as  gold  coin  anywhere.  What  do 
you  think  would  have  been  the  effect  on  our  credit  of 
the  continuance  of  the  coinage  of  silver  dollars  under 
the  Bland  bill,  there  being  neither  obligation  nor  au- 
thority resting  upon  the  government  to  exchange  these 
silver  dollars  for  gold  dollars,  and  the  purpose  of  the 
American  people  being  learned  only  from  the  fact  that 
under  its  existing  law  it  was  coining  $24,000,000  worth 
of  fiat  money  annually,  to  grow  to  $48,000,000  worth 
whenever  a  Secretary  of  the  Treasury  agreeing  with 
Mr.  Carlisle  should  come  into  power ;  and  that  there 
was  a  congress,  both  of  whose  houses  were  purposing  to 
substitute  for  that  an  unlimited  coinage  of  depreciated 
silver  whenever  they  could  get  rid  of  the  constitutional 
restraint  imposed  only  by  an  individual  will  ? 

There  has  never  been  a  day  since  the  resumption  of 
specie  payments  until  long  since  the  present  adminis- 
tration came  into  power  when,  if  you  had  taken  a  thou- 
sand dollars  in  gold  and  a  thousand  dollars  in  silver 
into  any  national  bank  in  the  country,  the  bank  would 
have  given  a  dollar  for  its  choice  between  the  two  as  a 
deposit.  It  may  be  that  a  bank — one  of  whose  cus- 
tomers was  paying  a  large  body  of  workmen  their  wages 
on  a  pay  day — might  have  given  something  for  the  sil- 
ver for  convenience  of  making  change.  The  silver 
currency  of  the  country  was  maintained  practically  on 
an  equality  with  gold. 

I  believe  that  if  President  Cleveland  in  his  inaugural 
address  had  declared  that  every  authority  vested  in 
him,  or  in  the  treasury  department,  would  be  used  to 


198  SILYEB  AND  GOLD. 

keep  every  dollar  of  our  currency  as  good  as  every 
other,  and  had  been  left  at  liberty  by  the  pledges  of  the 
platform  on  which  he  was  elected  to  add  assurances 
that  there  should  be  no  change  made  in  the  protective 
system  which  should  not  take  effect  far  enough  ahead 
to  allow  existing  Industrie^  to  adapt  themselves  to  the 
new  condition  of  things,  the  calamity  which  is  upon  us 
would  not  have  come. 

The  purchase  of  silver  under  the  act  of  1890,  in  my 
judgment,  is  a  wasteful  and  extravagant  expenditure 
of  the  public  money.  It  never  could  have  been  ex« 
cused,  but  as  an  escape  from  the  fiat  money  of  the 
Bland  bill,  and  from  the  threat  of  an  absolute  free  coin- 
age of  silver.  But  we  could  have  maintained  our  na- 
tional credit  and  the  integrity  of  our  national  currency 
in  spite  of  it,  without  disaster  or  panic,  but  for  the  ad- 
vent of  President  Cleveland  to  power. 

No  candid  advocate  of  silver  currency  can  afSrm  that 
the  people  of  the  United  States  have  not  gone  to  the 
extreme  limit  of  public  safety  in  the  struggle  to  main- 
tain silver  in  connection  with  gold  as  the  monetary 
standard.  We  have  purchased  this  metal  and  coined  it 
and  given  it  a  legal  tender  power  beyond  its  value  for 
fifteen  years.  We  have,  at  the  expense  of  the  people, 
purchased  it  in  large  quantities  beyond  any  public  ne- 
cessity and  beyond  any  desire  of  the  people  to  use  it  as 
money.  During  all  this  time  it  has  been  constantly  on 
the  decline.  Even  India  has  abandoned  it.  Certainly 
the  experiment  has  been  fully  tried  and  the  government 
has  gone  to  the  extent  of  ito  resources  in  obedience  to 
their  desire. 

I  suppose  that  with  the  coinage  of  the  silver  dollar 
stopped,  this  country  could  maintain  without  difficulty 


JOHN  SHERMAN, 


8ENAT0K   GEOBGK  F.   HOAR.  201 

our  present  volume  of  silver  currency  oi>  an  equality 
with  gold.  Some  of  our  friends  are  apt  to  point  with 
dismay  to  the  mass  of  silver  coin  in  the  treasury.  But 
every  coin  in  the  treasury  that  is  represented  by  a  sil- 
ver certificate  is  in  practical  circulation  in  the  most 
convenient  way.  I  do  not  believe  that  the  great  com- 
mercial nations  of  the  world  will  long  submit  to  be  de- 
prived of  the  great  advantage  which  seems  to  me  to 
come  from  the  use  of  both  the  precious  metals.  I  look 
still  for  an  international  agreement  upon  this  subject 
If  that  shall  come,  the  relation  of  the  two  metals  to 
each  other  will  be  carefully  reconsidered. 

But  I  believe  one  cau  be — ^I  will  not  say  established 
by  law,  but  I  will  say — ascertained  by  experience 
which,  when  recognized  by  law  and  by  the  common 
consent  of  mankind,  can  be  maintained  without  sub* 
stantial  change  for  generations  to  come.  From  such  a 
condition  of  tilings  the  communities  upon  whom  the 
present  crisis  bears  the  hardest  will  reap,  in  my  opinion, 
the  most  abundant  harvest.  They  will  cease  to  depend 
on  a  single  product,  fluctuating  in  price,  with  its  ever- 
present  temptation  to  gambling  and  speculation. 

I  am  not  unmindful  of  the  opinion  of  some  of  the 
wisest  and  best  financiers  that  the  supply  of  gold  is 
sufficient  for  the  world's  wants  for  a  metallic  currency 
and  a  standard  of  valuia.  I  do  not  agree  with  the*^ ; 
but  it  may  be  that  the  product  of  gold  will  increase,  at 
least,  to  the  world's  needs  in  that  respect,  if  not  suffi* 
cient  now.  This  opinion  may,  in  the  end,  prevail  I 
do  not  think  anybody  who  can  be  trusted  has  settled 
yet  what  are  the  wants  of  the  world's  business,  or  has 
any  very  clear  idea  on  the  subject  or  knows  very  accu- 
rately what  is  likely  to  be  the  world's  product  of  gold* 
12 


202  SILVER  AND  GOLU. 

Within  twenty  years  silver  has  been  discarded  as  a 
measure  of  value  in  every  country  of  importance  but 
Mexico.  It  is  not  a  measure  of  value  in  the  United 
States,  and  has  not  been  since  1884.  There  is  no  hu- 
man probability  that  it  will  ever  be  restored  to  that 
function  unless  some  time  in  the  future  the  supply  of 
gold  shall  become  subject  to  great  fluctuation  and  the 
supply  of  silver  become  steady.  We  can  not  provide 
for  such  contingencies  and  it  is  needless  to  speculate 
about  them.  But  I  am  utterly  opposed  to  a  declaration 
that  we  will  never  use  silver  again  as  currency,  or  will 
never  again  coin  it  for  a  legal  tender. 

To  make  such  a  declaration  by  congress,  or  to  adopt 
such  a  policy,  would,  in  my  opinion,  arm  every  agitator 
and  anarchist  and  socialist  with  an  almost  irresistible 
weapon.  They  would  say  that  by  the  perpetual  adop- 
tion of  a  single  standard  the  world's  burden  of  debt 
would  be  constantly  growing  heavier,  and  that  the 
prices  of  the  world's  product  would  gradually  and  con- 
stantly be  falling.  In  support  of  their  contention  they 
would  point,  not  only  to  the  opinions  of  the  fathers^ 
.  but  to  the  recent  utterances  of  nearly  every  public  man 
of  all  parties;  of  candidates  for  the  presidency;  ot 
nominating  conventions ;  and,  with  scarcely  an  excep* 
tion,  of  every  person  clothed,  or  likely  soon  to  be 
clothed  with  legislative  authority.  They  would  point 
to  the  fact  that  even  in  England  the  representatives  of 
the  last  Tory  administration  inclined  more  and  more  to 
the  bimetallic  standard,  properly  adjusted,  and  to  the 
policy  of  giving  silver  a  share  in  the  function  assigned 
to  the  precious  metals.  I  suppose  they  adhere  to  that 
view  now.  I  do  not  believe  that  a  policy  of  eterna] 
monometallism,  adopted  in  a  time  of  panic,  could  stand* 


8BNAT0B  QWnois  F.  HOAE.  208 

'hould  ZT^^  ^r  "•^*  --'-  to  aa,  that  there 

Po%,  if  we  adont  •?    T'""'°"*^  ""*^°°«-     Upon  that 

'0  it,  alike  bv T.    ,  ^''^"°*^Jy.  ^«  «hall  be  compelled 

°f  all  classes  ^  A  J  V'1:  ''  *"^«  ''"'  ^^  *^«  °«««^J«e' 
the  countrv  *i     ^  ^'  ''^^ever,  of  the  laboring  men  of 

«»<i  a  .S;:;:dir  '°'  "^^  ""'°"*  *  atable^urrenc, 


^      V?.  (j/t^^'z^v-^ 


S04  SILy£B  Al^D  QOhD. 


CHAPTER  V. 

BY  SENATOR  JOHN  SHEBMAN  OF  OHIO. 

If  we  adopt  the  single  standard  of  gold  without  aid 
from  silver,  we  will  greatly  increase  the  burden  of 
national  and  individual  debts,  disturb  the  relation  be- 
tween capital  and  labor,  cripple  the  industries  of  the 
country,  still  further  reduce  the  value  of  silver,  of  which 
we  now  have  in  the  treasury  and  among  our  people 
over  $693,000,000,  and  of  which  we  are  the  chief  pro- 
ducer, and  invite  a  struggle  with  the  great  commercial 
nations  for  the  possession  of  the  gold  of  the  world. 

On  the  other  hand,  if  we  continue  the  purchase  of 
silver,  we  will  eventually  bring  the  United  States  to 
the  single  standard  of  silver — a  constantly  depreciating 
commodity,  now  rejected  by  the  great  commercial  na- 
tions as  a  standard  of  value  ;  a  commodity  confessedly 
inconvenient  by  its  weight,  bulk,  and  value  for  the 
large  transactions  of  foreign  and  domestic  commerce, 
and  detach  us  from  the  money  standard  now  adopted 
by  all  European  nations,  with  which  we  now  have  our 
chief  commercial  and  social  relations.  In  dealing  with 
such  a  question  we  surely  ought  to  dismiss  from  our 
minds  all  party  affinities  or  prejudices ;  all  local  and 
sectional  interests,  and  all  preconceived  opinions  not 
justified  by  existing  facts  and  conditions. 

Upon  one  thing  I  believe  that  all  agree  :  That  both 
these  extreme  positions  shall  be  rejected ;  ^I.^!:  both  sil- 
ver and  gold  should  be  continued  in  use  as  money — a 


8BKATOB  JOHN  SHERMAN.  S06 

measure  of  value ;  that  neither  can  be  dispensed  with. 
Monometallism,  pure  and  simple,  has  never  gained  a 
foothold  in  the  United  States.  We  are  all  bimetallists. 
But  there  are  many  kinds  of  bimetallists.  One  kind 
favors  the  adoption  of  the  cheaper  metal  for  the  time 
being  as  the  standard  of  value.  Silver  being  now  the 
cheaper  metal,  they  favor  its  free  coinage  at  the  present 
ratio,  with  the  absolute  certainty  that  silver  alone  will 
be  coined  at  our  mints  as  money ;  that  gold  will  be  de- 
monetized, hoarded  at  a  premium,  or  exported  where  ii 
is  maintained  as  standard  money.  The  result  would  be 
monometallism  of  silver. 

Another  kind  of  bimetallist,  recognizing  that  16  ounces 
of  silver  are  not  worth  in  the  market  1  ounce  of  gold, 
proposes  the  free  coinage  of  20  ounces  of  silver  as  the 
equivalent  of  1  ounce  of  gold.  But  this  is  only  a  dif- 
ference in  degree,  because  1  ounce  of  gold  is  worth  from 
27  to  29  ounces  of  silver.  Gold  being  undervalued,  the 
hoarding  or  exportation  of  gold  will  inevitably  follow, 
and  silver  will  be  the  only  standard.  Another  kind  of 
bimetallist  is  one  who  believes  that  the  essential  quality 
of  bimetallism  requires  that  the  coins  of  the  two  metals 
shall  be  maintained  of  equal  purchasing  power.  The 
only  way  in  which  this  can  be  done,  in  case  the  two 
metals  are  not  on  a  parity  of  value  at  the  legal  ratio,  is 
by  freely  coining  the  more  valuable  metal  and  coining 
the  cheaper  metal  at  the  legal  ratio,  and  maintaining 
by  the  fiat  of  the  government  coins  of  the  two  metals 
at  parity  with  each  other. 

The  two  metals,  as  metals,  never  have  been,  are  net 
now,  and  never  can  be  kept  at  par  with  each  other  foi^ 
any  considerable  time  at  any  fixed  ratio.  This  neceg* 
sarily  imposes  upon  the  government  the  duty  of  buying 


20^6  SILVBB  AKD  GOLD. 

the  cheaper  metal  and  coining  it  into  money.  The  got* 
ernment  should  only  pay  for  the  bullion  its  market 
value,  for  it  has  the  burden  of  maintaining  it  at  par  with 
the  dearer  metal.  If  the  bullion  falls  in  price  the  gov- 
ernment must  make  it  good ;  if  it  rises  in  value  the 
government  gains. 

The  government  is  thus  always  interested  in  advanc 
ing  the  value  of  the  cheaper  metal.  This  is  the  kind 
of  bimetallism  I  believe  in.  It  is  the  only  way  in  which 
two  commodities  of  unequal  value  can  be  maintained  at 
parity  with  each  other.  The  free  coinage  of  silver  and 
gold  at  any  ratio  you  may  fix  means  the  use  of  the 
cheaper  metal  only.  This  is  founded  on  the  universal 
law  of  humanity,  the  law  of  selfishness.  No  man  will 
carry  to  the  mint  1  ounce  of  gold  to  be  coined  into 
dollars  when  he  can  carry  16  ounces  of  silver,  worth  but 
little  more  in  the  market  than  half  an  ounce  of  gold, 
and  get  the  same  number  of  dollars. 

The  free  coinage  of  silver  means  the  single  standard 
of  silver.  It  means  a  cheaper  dollar,  with  less  purchas- 
ing power.  It  means  a  reduction  in  the  wages  of  labor ; 
not  in  the  number  of  dollars,  but  in  the  quantity  of 
bread,  meat,  clothes,  comforts  he  can  purchase  with  his 
daily  wage.  It  means  a  repudiation  of  a  portion  of  all 
debts,  public  and  private.  It  means  a  bounty  to  all  the 
banks,  savings  institutions,  trust  companies  that  are  in 
debt  more  than  their  credits.  It  means  a  nominal  ad- 
vance in  prices  of  the  produce  of  the  farmer,  but  a  de- 
crease in  the  purchasing  power  of  his  money.  Its  chief 
attraction  is  that  it  enables  a  debtor  to  pay  his  debt 
contracted  upon  the  existing  standard  with  money  of 
less  value.  If  we  want  cheap  money  and  to  advance 
prWes,  &ee  coinage  is  the  way  to  do  it ;  but  do  not  call 


&^Af OB  JOHK  SHERMAN.  20t 

it  bimetajilism.  The  problem  we  have  to  solve  is  how 
to  secure  to  our  people  the  largest  use  of  both  gold  and 
silver  without  demonetizing  either. 

It  so  happens  that  while  our  country  is  vast  and  rich, 
and  full  of  wealth  in  the  past  and  in  its  promises  for  the 
future,  yet,  from  its  peculiar  position,  it  may  be  made 
the  base  from  which  gold,  silver,  or  anything  else  may 
be  drawn. 

There  is  among  the  nations  of  the  world  one  great 
creditor  nation,  which  holds  bonds  and^  securities  in 
various  forms  to  the  amount  of  thousands  of  millions  of 
dollars.  It  is  a  country  which  has  not  been  invaded  by 
a  foreign  foe  for  five  hundred  years.  Its  insular  posi- 
tion is  its  safety  and  its  fortress.  It  is  a  nation  of  in- 
telligent people,  who  command  the  commerce  of  the 
world,  whose  flag  floats  on  every  sea.  We  ought  not 
to  be  ashamed  of  them,  or  to  hate  them  or  dislike  them, 
because  we  are  their  children  and  possess  very  many  of 
the  qualities  of  the  parent  stock. 

England  is  the  great  creditor  nation,  but  in  her  vast 
enterprises  she  became  involved  in  difiBculties  since  the 
passage  of  the  act  of  1890.  Large  investments  were 
made  by  her  capitalists  in  the  Argentine  Confederacy, 
amounting  to  hundreds  of  millions  of  dollars.  They, 
by  some  sudden  collapse,  were  entirely  lost ;  the  Bank 
of  England  was  threatened,  and  was  compelled  to 
make  good  those  losses,  at  least  to  the  extent  of  the 
drafts  made  upon  England,  in  order  to  maintain  the 
banking  houses  of  England,  which  might  have  other- 
wise toppled  to  their  fall,  perhaps  carrying  with  them 
the  old  mother  of  them  all,  the  Bank  of  England. 

These  difficulties  suddenly  grew  up  and  England 
was  compelled  to  obtain  money  from  France  and  other 


208  SILYEK  ANI>  GOLD. 

parts  of  Europe.  The  immediate  result  was  that  our 
securities  were  sent  home  here  to  our  market.  They 
held  our  securities  abroad,  and  now  hold  them«  to  the 
amount  of  billions  of  dollars.  They  were  sent  here  for 
sale,  and  the  proceeds  in  gold  were  shipped  back  to  pay 
the  losses  of  Great  Britain  in  the  Argentine  Confed- 
eration. 

As  I  say,  our  country  i§  great,  rich,  and  powerful ; 
but  we  have  this  difficulty,  it  is  a  new  country.  Our 
wealth  is  not  in  gold  and  in  silver,  not  in  money,  not 
even  in  bonds  and  mortgages  to  send  abroad.  Our 
wealth  is  in  our  mines,  our  farms,  our  workshops,  and  our 
railroads — the  most  wonderful  development  of  modem 
times,  because  we  have  in  this  great  agency  of  com- 
merce more  miles  of  railroad  than  all  the  nations  of  the 
world. 

These  are  our  sources  of  wealth,  but  they  are  also 
causes  of  danger,  because  they  could  not  have  been  de- 
veloped in  the  last  few  years  without  going  into  debt, 
and  that  debt  may  be  demanded  at  any  time  and  will 
draw  from  us  gold,  silver,  or  anything  else. 

Following  the  Argentine  trouble,  the  banks  of 
Australia  failed,  and  the  same  process  went  on  the^v. 
with  the  same  result.     They  drew  upon  our  gold. 

Not  only  that,  but  other  causes  combined  to  proQuce 
this  trouble.  At  the  very  time  when  we  were  carrying 
on  this  experiment  under  the  act  of  1890,  Austria- 
Hungary,  Roumania,  and  several  other  countries  of 
Europe  were  changing  from  a  paper  or  a  silver  standard 
to  gold,  and  they  made  demands  upon  us.  They  did 
it  through  the  English  bankers,  who  were  compelled  to 
sell  American  securities  in  order  to  draw  our  gold 
away,  and  then,  after  the  decline  of  these  securitieSi 


8BKAT0R  JOHN  SHERMAN.  Mi 

caut>i/d  by  their  sudden  sale,  recouped  their  losses  In  the 
market  by  buying  them  at  an  advance  in  a  short  period. 
That  was  an  additional  trouble. 

There  was  still  another  trouble.  For  the  fivst  time 
in  many  yeai*S9  the  balance  of  trade  turned  against  us. 
Hitherto  we  have  boasted  of  from  fifty  to  one  hundred 
million  and  sometimes  two  hundred  million  dollars  baU 
ance  in  our  favor,  which  helped  us  to  pay  our  debts  and 
the  debts  of  our  people ;  yet  during  the  fiscal  year, 
ending  on  the  80th  of  June,  1893,  the  balance  of  trade 
against  us  was  918,735,728. 

The  act  of  1890  demonstrated  the  inevitable  result 
of  free  coinage  in  our  country.  If  the  purchase  of 
54,000,000  ounces  of  silver  a  year  did  not  prevent  the 
further  decline  of  that  metal,  what  would  have  been 
the  result  if  we  received  and  coined  all  the  silver  that 
would  be  brought  into  the  United  States  tfrom  any 
region  of  the  world  at  the  fixed  price  of  $1.29  per 
ounce,  worth  in  the  market  73  cents  an  ounce?  This 
is  a  proposition  the  logic  of  which  it  is  impossible  to 
avoid.  It  is  a  lesson  necessarily  to  be,  taught.  With- 
out it  many  honest  people  could  not  be  persuaded  that 
the  fiat  of  the  government  was  not  sufficient  to  lift  the 
price  of  silver  or  to  prevent  its  falL 

There  is  no  doubt  that  the  act  of  1890  is  made  the 
imaginary  pretext  for  many  evils  it  did  not  produce. 
It  is  made  to  bear  the  results  of  wild  speculation,  of 
fears  well  or  ill  founded  as  to  future  legislation,  of  fail- 
ures and  disturbances  with  which  it  has  no  connection. 
It  is  made  the  scapegoat  for  extravagance  and  folly. 
The  fears  of  business  men  that  the  tariff  policy  of  the 
Democratic  party  will  disturb  all  domestic  industries 
and  op^n  our  markets  at  cheap  rates  to  the  produotionf 


210  StLVfift  AND  GOLDi 

of  every  country  in  the  world,  and  the  cautionalrjf 
measures  taken  by  them  to  guard  against  this  competi- 
tion is  a  far  more  potent  cause  for  distrust,  stopping  of 
factories  and  worksliops,  than  the  purchase  of  4,500,000 
ounces  of  silver  a  month. 

Certain  it  is  that  the  act  of  1890  did  not  produce  a 
scarcity  of  currency.  The  evil  which  our  people  have 
been  suffering  was  not  the  volume  of  money  but  the 
hoarding  of  it.  It  was  a  currency  famine  caused  by 
the  hoarding  of  money  taken  from  its  ordinary  channels 
and  hidden  away  in  secret  places  by  reason  of  the  fears 
of  millions  of  people  in  all  ranks  and  conditions  of  life. 

Now,  I  wish  to  make  a  few  observations  in  regard  to 
what  ought  to  be  done  for  the  future. 

I  take  it  the  first  object  we  all  have  in  view  is  to  pre- 
serve intact  the  parity  of  all  our  money.  We  have  now 
seven  or  ^ight  hundred  million  dollars  of  paper  money 
outstanding  for  which  we  are  responsible.  We  have 
undertaken  to  maintain  that  at  a  parity.  How  can  it 
be  done  ?  Ordinarily  a  small  reserve  would  be  suffi- 
cient to  give  security  to  everyone  and  prevent  any  fear ; 
but  in  times  like  these,  in  my  judgment,  it  is  the  duty 
of  the  prevailing  party,  who  have  the  power  of  the  gov- 
ernment in  their  hands  and  can  exercise  that  power  at 
any  moment,  to  strengthen  the  reserve,  so  that  nobody 
will  fear  we  will  not  maintain  the  parity  of  all. forms  of 
money  in  our  country. 

In  order  to  carry  that  out  it  may  tie  necessary  to  is- 
sue the  securities  of  our  country  to  buy  gold.  They 
will  command  gold  in  any  market.  They  would  draw 
it  from  the  Bank  of  England.  A  demand  note,  a 
note  payable  at  the  pleasure  of  the  United  States, 
drawing,  say,  not  to  exceed  4  per  cent,  interest,  would 


SfiKATOR  JOHK  SfiEBMAK.  21l 

command  gold  everywhere ;  and  it  is  the  only  way  by 
which  the  government  can  summarily  acquire  th<d  pas- 
session  of  gold  to  maintain  its  reserve. 

I  wish  now  to  call  attention  to  the  coinage  act  of 
1873,  which  has  been  the  subject  of  so  much  misrep- 
resentation and  falsehood  in  this  debate.  I  propose 
to  show,  in  the  most  unequivocal  mannei,  the  decep- 
tion and  falsehood,  largely  the  result  of  cowardice, 
that  has  been  uttered  in  respect  to  the  act  I  refer  to. 

When  the  coinage  ratio  was  fixed  by  Alexander 
Hamilton  of  15  ounces  of  silver  as  the  equivalent  of  1 
ounce  of  gold,  it  was  substantially  equivalent  to  the 
market  ratio,  but  the  constant  tendency  of  silver  to  de- 
cline in  relative  value  had  been  going  on  for  years  and 
Bontinued  in  an  almost  imperceptible  degree,  so  that 
when  the  French  standard  was  fixed  at  15^  to  1,  the 
Kttle  gold  then  in  the  United  States  was  exported, 
»nd  silver  alone  wa«9  the  coin  in  circulation.  At 
^hat  time,  and  for  ma:iy  }'ears,  foreign  silver  coins 
were  largely  cir^juiaied  as  money  in  the  United  States, 
mostly  in  worn  aid  depreciated  coin  worth  less  than  its 
nominal  vali:e«  This  caused  the  silver  dollar,  then 
toined  in  sma)}  quantities,  to  be  melted,  as  more  valu- 
able than  tho  coin  then  in  circulation. 

Mr.  Jefferson,  in  1805,  discontinued  the  coinage  of 
the  silver  dollar,  and  for  thirty  years  not  a  dollar  was 
issued.  Our  currency  was  either  the  paper  of  State 
banks,  fractional  coins,  or  depreciated  foreign  silver 
coins.  The  Spanish  milled  dollar  and  the  Mexican  silver 
dollar  still  continued  to  be  the  legal  standard  of  money 
in  this  country  until  1878,  some  of  it  at  least.  So  the 
only  dollars  then  in  circulation  in  this  country  were 
dollars  of  foreign  manufacture.    After  the  action  in 


21£  SHiVBR   AND   GOLD. 

1885,  etc.,  they  were  beginning  to  be  coitied  more  oi 
less,  but  almost  entirely  for  the  Chinese  trade.  They 
were  exported  there  during  and  since  our  civil  war,  at 
the  time  when  specie  payments  were  suspended  in  all 
parts  of  our  country  except  in  California.  Practically 
no  gold  coin  was  then  in  circulation.  This  continued 
until  June  28,  1884,  when,  in  order  to  secure  gold  in 
circulation,  the  ratio  was  changed  to  16  of  silver  to  1 
of  gold.  The  object  of  this  change  was  distinctly 
stated,  especially  by  Mr.  Benton,  who  said : 

*^  To  enable  the  friends  of  gold  to  go  to  work  at  the 
right  place  to  effect  the  recovery  of  that  precious  metal 
which  their  fathers  once  possessed ;  which  the  subjects 
of  European  kings  now  possess ;  which  the  citizens  of 
the  young  republics  to  the  south  all  possess;  which 
even  the  free  negroes  of  San  Domingo  possess;  but 
which  the  yeomanry  of  this  America  have  been  de- 
prived for  more  than  twentv  years,  and  will  be  de- 
prived forever  unless  they  aiscover  the  cause  of  the 
evil  and  apply  the  remedy  to  its  root." 

By  the  act  of  1884,  superadded  to  by  iLe  act  of  1887, 
the  ratio  of  16  to  1  instead  of  15  to  1  was  adopted. 
The  result  was  that  gold  coins  were  largely  introduced 
and  circulated ;  but  as  16  ounces  of  silver  were  worth 
more  than  1  ounce  of  gold,  the  silver  coins  disappeared, 
except  the  depreciated  silver  coin  of  other  countries, 
then  a  legal  tender.  To  correct  this  evil  congress, 
February  21, 1858,  provided  for  the  purchase  of  silver 
bullion.  That  was  the  first  time  the  government  had 
ever  undertaken  to  buy  bullion  for  coinage  purposes,  so 
far  as  I  now  remember.  It  provided  for  the  purchase 
of  silver  bullion  and  the  coinage  of  subsidiary  silver 
coins  at  the  ratio  of  less  than  15  to  L 


8EKAT0B  JOHN  SHERMAN.  218 

As  the  value  of  these  coins  was  less  than  gold  at  the 
coinage  ratio,  they  were  limited  as  a  legal  tender  to  $6 
in  any  one  payment.  They  were,  in  fact,  a  subsidiary 
coin  made  on  government  account,  and,  from  their  con- 
venience and  necessity,  maintained  in  circulation.  They 
are  the  very  coins  now  in  use,  revived  and  reenacted  by 
the  resumption  act  of  1875. 

It  was  not  the  intention  of  the  framers  of  this  law 
to  demonetize  silver,  because  they  were  openly  avowed 
bimetallists,  but  it  limited  coinage  to  silver  bought  by 
the  government.  They  iaw  in  this  expedient  a  way  in 
which  silver  could  be  more  generally  utilized  than  in 
any  other.. 

After  the  passage  of  the  act  of  February  21,  1858, 
gold  in  great  quantities,  the  product  of  the  mines  in 
California,  was  freely  coined  at  the  ratio  of  16  to  1, 
ai>d  was  in  general  circulation.  If,  then,  the  purchase 
of  silver  instead  of  the  free  coinage  of  silver  is  the  de- 
monetization of  silver,  it  was  demonetized  practically 
in  1885,  and  certainly  in  1858,  when  the  purchase  of 
silver  and  its  use  as  money  increased  enormously.  In 
1852  the  coinage  of  silver  was  less  than  $1,000,000.  In 
the  next  year  the  coinage  of  silver  rose  to  over  $9,000,- 
000,  and  reached  the  aggregate  of  nearly  $50,000,000 
before  the  beginning  of  the  civil  war.  Then,  as  now, 
the  purchase  of  silver  bullion  led  to  a  greater  coinage 
than  free  coinage. 

This  was  the  condition  of  our  coinage  until  the  war, 
like  all  other  great  wars  in  history,  drove  all  coins  into 
hoarding  or  exportation,  and  paper  promises,  great  and 
small,  from  five  cents  to  a  thousand  dollars,  supplanted 
both  silver  and  gold. 

N«w  we  eome  to  the  aet  of  1878,  which  dropped 


Hi  SILVBB  AKD  GOLD. 

from  the  coin  the  silver  dollar.  The  charge  has  been 
made  over  and  over  again  that  this  was  surreptitiously 
done ;  that  it  was  done  under  cover  in  some  way.  That 
has  been  clearly  disproved  by  the  exhibition  of  the 
public  records,  and  it  seems  to  me  that  every  intelligent 
man  ought  now  to  have  seen  that  fact.  But  there  has 
been  a  repetition  of  that  imputation.  It  was  an  impu- 
tation against  the  whole  mass  of  the  forty-second  con- 
gress^ and  yet  in  conventions  no  doubt  of  honest  and 
good  people — I  do  not  in  the  least  disparage  them — 
they  denounced  the  act  of  1873  as  a  fraud  and  as  a 
crime  ;  yes,  it  was  the  crime  of  1873. 

What  is  the  history  of  that  bill?  It  was  a  bill 
framed  in  the  treasury  department.  It  did  not  come 
into  congress  in  the  ordinary  way,  but  it  was  framed  in 
the  treasury  department  by  a  distinguished  body  of  ex- 
perts, every  one  of  whose  names  is  now  borne  with 
honor  wherever  it  is  mentioned.  Most  of  them  are 
dead,  but  some  of  them  are  living.  Mr.  Pollock,  long 
a  Director  of  the  Mint;  Mr.  Secretary  Boutwell,  who 
claims  to  be  the  author  of  the  bill,  and  properly  so,  be- 
cause he  was  at  the  head  of  the  department ;  Mr.  John 
Jay  Knox,  who  held  the  oflBce  of  Deputy  Comptroller 
of  the  Currency ;  Mr.  Linderman,  who  was  Director  of 
the  Mint ;  Mr.  Patterson,  who  was  Superintendent  of 
the  Mint  at  Philadelphia,  and  a  whole  host  of  other  ex- 
perts, framed  that  bill  after  a  most  elaborate  corres- 
pondence, which  is  contained  in  the  official  documents 
communicated  to  congress  at  the  time. 

So  the  whole  matter  was  open.  They  circulated 
thousands  of  copies  of  the  bill  to  everybody  who  de- 
sired to  read  it  or  could  be  prevailed  upon  to  read  it,  in 
order  to  get  the  sense  and  judgment  of  the  expei-ts  of 


SENATOB  JOHN  SHERMAN.  215 

our  country  in  respect  to  the  coinage,  and  those  an- 
swers are  printed  in  a  public  document  communicated 
to  congress  upon  the  call  of  the  house  of  representa- 
tives before  a  single  step  was  taken  on  the  bill. 

These  were  men  of  untarnished  character.  It  was  a 
scientific  bill,  a  bill  that  members  of  congress  do  not 
care  much  about  handling,  because  if  we  are  lawyers 
we  are  not  metallists ,  if  we  are  business  men  we  do 
not  know  anything  about  the  mystery  of  coinage,  one 
of  the  most  subtle  and  careful  sciences.  These  were 
men  who  would  rather  pore  over  a  table  of  logarithms 
or  study  a  problem  in  geometry  or  do  something  of  that 
kind  than  do  anything  to  tarnish  their  name  and  their 
fame.  They  prepared  this  bill  at  the  request  of  the 
Secretary  of  the  Treasury,  and  it  was  communicated  to 
*  congress. 

The  bill  contains  seventy-one  sections.  Sections  15 
and  18  of  the  bill  are  the  only  ones  to  which  this  impu- 
tation has  ever  been  made.  I  have  here  sections  15 
and  18  as  originally  introduced  by  the  Secretary  of  the 
Treasury  and  sent  to  the  Committee  on  Finance. .  Here 
are  the  original  sections : 

"  Sec.  15.  And  be  it  further  enacted^  That  of  the  sil- 
ver coin,  the  weight  of  the  half-dollar,  or  piece  of  50 
cents,  shall  be  192  grains ;  and  that  of  the  quarter- 
dollar  and  dime  shall  be,  respectively,  one-half  and  one- 
fifth  of  the  weight  of  said  half-dollar.  That  the  silver 
coin  issued  in  conformity  with  the  above  section  simll 
be  a  legal  tender  in  any  one  payment  of  debts  for  all 
sums  less  than  f  1. 

"  Sec.  18.  And  he  it  further  enacted^  That  no  coins, 
either  gold,  silver,  or  minor  coinage,  shall  hereafter  be 
issued  from  the  mint  other  than  those  of  the  denomina- 
tions, standards,  and  weights  herein  set  forth." 


216  BILYEB  AND  GOLD. 

Under  that  section  the  dollar  was  dropped  from  the 
coinage,  a  dollar  that  had  scarcely  been  used  for  nearly 
seventy  years  except  to  put  silver  in  form  for  exporta- 
tion.   But  I  will  allude  to  that  more  hereafter. 

These  sections  in  the  three  years  that  the  bill  was 
pending  in  congress  were  changed  either  in  the  house 
or  senate  in  only  one  or  two  unimportant  particulars. 
The  house  of  representatives  thought  it  was  necessary 
to  provide  a  dollar.  They  knew  that  the  dollar  was 
dropped  out,  as  everybody  else  must  have  known,  be- 
cause the  gentleman  who  framed  the  original  bill  give 
the  history  of  the  act,  and  this  matter  was  pointed  out 
by  them.     It  was  discussed  and  the  reasons  given. 

I  have  the  form  which  these  two  sections  assumed 

when  the  bill  was  finally  passed.    Here  is  the  differ- 
ence: 

*^  That  the  silver  coins  of  the  United  States  shall  be 
a  trade  dollar." 

Instead  of  a  trade  dollar,  and  omitting  the  dollar  of 
412|  grains — nobody  proposed  such  a  dollar — the 
house  of  representatives  put  on  a  dollar  of  884  grains, 
and  that  was  to  be,  like  the  half-dollar,  a  subsidiary 
coin.  It  was  to  be  of  the  exact  weight  of  two  half- 
dollars.  That  was  put  on  by  the  house  of  representa- 
tives, because  they  wished  to  keep  the  form  of  a  dollar, 
and  it  continued  384  grains. 

The  bill  was  pending  during  three  different  sessions 
of  congress.  The  dollar  of  384  grains  was  inserted 
when  it  came  to  us  from  the  house.  The  bill  of  1870 
having  passed  the  senate,  failed  in  the  house  of  repre- 
sentatives for  want  of  time.  In  the  following  congress 
the  same  bill  was  taken  up  in  the  house,  there  consid* 


WILLIAM  M.  STEWAET, 


SENATOR  JOHN  SHERMAN.  219 

eredy  passed,  and  sent  to  the  senate.  The  senate  then, 
upon  the  demand  of  the  people  of  the  Pacific  coast  and 
the  petition  of  the  State  of  California,  inserted,  instead 
of  the  884-grain  dollar,  the  trade  dollar  containing  420 
grains.  The  senate  also  dropped  out  the  word  "  grains," 
which  had  been  introduced  in  the  house,  and  in  that 
form  it  finally  passed.  Throughout  all  these  changes 
this  provision  remained : 

"  Seo.  17.  That  no  coins,  either  of  gold,  silver,  or 
minor  coinage,  shall  hereafter  be  issued  from  the  mint 
other  than  those  of  the  denominations,  standards,  and 
weights  herein  set  forth.*' 

It  is  thus  shown  that  from  the  first  introduction  of 
the  bill,  April  25,  1870,  until  its  final  passage  into  a 
law,  February,  1873,  the  silver  dollar  of  412J  grains 
was  dropped  from  the  silver  coins,  and  by  section  17 
was  prohibited. 

The  finance  committee  carefully  examined  that  bill. 
We  were  not  In  any  hurry  about  it.  It  was  sent  to  us 
in  April,  1870.  In  December,  1870,  the  Committee  on 
Finance,  after  a  careful  examinatidn,  after  having  the 
bill  printed  and  sent  by  the  order  of  the  senate  to 
everyone  who  desired  to  read  it  or  look  over  it,  re- 
ported it  unanimously. 

The  bill  was  reported  to  the  senate  December  19, 
1870,  after  lying  in  our  committee  room  for  eight 
months.  The  nature  of  the  bill  I  have  already  d^ 
scribed.  The  dollar  was  dropped  from  the  coinage  in 
the  bill  framed  in  the  treasury  department.  It  was 
then  an  unknown  coin.  Although  I  was  quite  active 
in  business  which  brought  under  my  eye  different  forms 
of  money,  I  do  not  remember  at  that  time  ever  to  bar^ 
It 


220  SILVER  AND  GOLD. 

0een  a  silver  dollar.  It  was  an  unknown  quantity* 
Probably  if  it  had  beeu  mentioned  to  the  committee 
and  discussed  it  would  have  been  thought,  as  a  matter 
of  course,  scarcely  worthy  of  inquiry.  If  it  was  known 
at  all,  it  was  known  as  a  coin  for  the  foreign  market. 

No  one  proposed  to  reissue  it.  The  Pacific  coast  had 
six  intelligent,  able,  and  competent  senators  on  this 
floor,  representing  a  population  then  of  not  more  than 
a  million,  if  that  much.  They  would  have  carefully 
looked  out  for  the  interests  of  silver,  if  the  bill  affected 
them  injuriously.  But  the  silver  dollar  at  that  time 
was  worth  more  than  the  gold  dollar.  California  and 
Nevada  were  on  the  gold  standard. 

As  I  said,  the  bill  was  printed  over  and  over  again, 
finally  reported,,  and  brought  before  the  senate  It 
w^  debated  for  three  days.  The  senator  from  Nevada, 
Mr.  Stewart,  took  a  leading  part  in  that  debate,  and 
every  senator  from  the  Pacific  coast  spoke  upon  the 
measure.  Representing  the  committee,  I  presented  the 
questions  as  they  occurred  from  time  to  time,  until 
finally  we  differed  quite  seriously  upon  the  question  of 
a  charge  for  the  coinage  of  gold.  The  only  yea  and- 
nay  vote  in  the  senate  on  the  passage  of  that  bill,  after 
two  days  debate,  occurred  on  the  10th,  day  of  January, 
1871. 

Every  one  of  the  six  members  from  the  Pacific  coast 
Voted  for  the  bill  after  full  debate. 

The  continuation  of  the  history  of  that  bill  through 
the  house  of  representatives  and  through  all  of  its 
stages  until  it  finally  passed  into  the  hands  of  the  Com* 
mittee  of  Conference  is  clearly  and  distinctly  stated  by 
the  report  of  Mr.  Knox,  which  has  been  published. 

The  bill  went  to  the  house  of  representatives.    The 


SENATOR  JOHN  SHEBMAIT.  221 

• 

official  record  shows  that  it  was  carefully  considered 
there,  especially  section  16,  dropping  the  old  dollar.  It 
3S  sometimes  said  that  nobody  explained  that  the  dollar 
was  demonetized.  Here  is  the  statement  made  by  Mr. 
Hooper,  who  had  charge  of  the  bill,  one  of  the  most 
eminent  men  who  has  been  furnished  the  house  of 
representatives  from  the  State  of  Massachusetts. 

"  Section  16  reenacts  the  provisions  of  existing  laws 
defining  the  silver  coins  and  their  weights,  respectively, 
except  in  relation  to  the  silver  dollar,  which  is  reduced 
in  weight  from  412^  to  384  grains ;  thus  making  it  a 
subsidiary  coin  in  harmony  with  the  silver  coins  of  less 
denomination  to  secure  its  concurrent  circulation  with 
them.  The  silver  doilar  of  412]^  grains,  by  reason  of 
its  bullion  and  intrinsic  value  being  greater  than  its 
nominal  value,  long  since  ceased  to  be  a  coin  of  circu- 
iation,  and  is  melted  by  manufacturers  of  silverware 
It  does  not  circulate  now  in  commercial  transactions 
with  any  country,  and  the  convenience  of  those  manu- 
facturers in  this  respect  can  better  be  met  by  supplying 
small  stamped  bars  of  the  same  standard,  avoiding  the 
useless  expense  of  coining  the  dollar  for  that  purpose. 
The  coinage  of  the  half  dime  is  discontinued  for  the 
reason  that  its  place  is  supplied  by  the  copper  nickel 
five- cent  piece,  of  which  a  large  issue  has  been  made 
and  which,  by  the  provisions  of  the  act  authorizing  its 
issue,  is  redeemable  in  United  States  currency •" 

That  shows  that  it  was  done  openly  and  fairly,  that 
attention  was  called  to  it,  and  that  it  was  debated.  Th« 
bill  finally  passed  the  house  of  representatives  on  the 
27th  of  May,  1872.  It  came  to  the  senate,  was  referred 
to  the  committee  on  finance,  and  not  reported  until 
December  16, 1872.  We  were  not  in  a  hurry  about  it^ 
It  was  a  great  measure,  a  heavy  measure.  It  was 
finally  brought  before  the  senate,  and  the  senate^ !» 


222  BILYEB  AND  GOLD. 

stead  of  providing  for  a  dollar  of  884  grains,  struck 
that  out  and  iuserted  the  trade  dollar.  That  trade  dol- 
lar was  only  a  legal  tender  for  $5.  It  was  not  until 
years  after,  when  that  trade  dollar  came  into  general 
circulation  here,  that  finally  the  legal  tender  quality 
was  given  to  it. 

The  bill  was  brought  up  again  before  the  senate  for 
final  consideration.  No  doubt  the  senate  was  some- 
what weary  of  it.  It  had  already  passed  the  senate  in 
the  previous  congress,  had  been  read  in  full  in  all  its 
cojjious  length,  and  was  then  taken  up  and  considered 
as  such  a  bill  is  very  apt  to  be  which  has  once  passed 
the  senate  of  the  United  States.  Finally,  after  debate 
upon  several  amendments,  it  was  passed  unanimously, 
and  then,  at  last,  I  was  charged  with  the  responsibil- 
ity for  it,  when  I  merely  voted  with  all  others  for  the 
bill. 

The  action  of  the  senate  was  unanimous.  The  only 
important  amendment  made,  I  think;  to  this  section,  or 
to  any  section  of  the  bill,  was  the  substitution  of  the 
trade  dollar  for  what  was  called  the  franc  dollar.  I  be- 
lieve the  dollar  provided  for  by  the  house  was  precisely 
the  equivalent  of  6  francs,  or  two  half  dollars  of  our 
subsidiary  coin.  Then  it  was  made  a  legal  tender  for 
only  $5. 

Tliere  never  was  a  bill  proposed  in  the  congress  of 
the  United  States  which  was  so  publicly  and  openly 
presented  and  agitated.  I  know  of  no  bill  in  my  ex- 
perience, which  was  printed,  as  this  was,  sixteen  times, 
in  order  to  invite  attention  to  it.  I  know  no  bill  which 
was  freer  from  any  immoral  or  wrong  influence  than 
this  act  of  1873.  Not  one  single  word  of  that  act  has 
been  impugned,  but  there  has  been  the  false  allege- 


SEKATOR  JOHN  SHERMAN.  228 

tion  made  that  the  silver  dollar  was  surreptitiously 
omitted  from  the  coinage.  No  fact  can  be  proved  more 
clearly  and  fully  than  that  is  a  falsehood  and  a  lie  by 
whomsoever  uttered. 

Now,  to  resume  for  a  moment  the  history  of  the  act 
of  1873 :  It  was  framed  in  the  treasury  department 
after  a  thorough  examination  by  experts,  transmitted 
to  both  houses  of  congress,  thoroughly  examined  and 
debated  during  four  consecutive  sessions,  the  informa- 
tion called  for  by  the  house  of  representatives  and 
printed  six  times  by  order  broadly  circulated,  and  many 
amendments  were  proposed,  but  no  material  changes 
were  made  in  the  coinage  clause  from  the  beginning  to 
the  end  of  the  controversy.  It  added  the  French  doL 
lar  for  a  time,  but  that  was  superseded  by  the  trade 
dollar,  and  neither  was  made  a  legal  tender  but  for  $5. 
It  passed  the  senate  on  the  10th  of  January,  1871 — 86 
yeas  and  14  nays — every  senator  from  the  Pacific  coast 
voting  for  it. 

It  was  introduced  in  the  house  of  representatives  by 
Mr.  Hooper  at  the  next  session.  It  was  debated, 
scrutinized,  and  passed  unanimously,  dropping  the  sil- 
ver dollar  as  directly  stated  by  Mr.  Hooper.  It  was 
reported,  debated,  amended,  and  passed  by  the  senate 
unanimously.  In  every  stage  of  the  bill  and  every  print 
the  dollar  of  412j^  grains  was  prohibited,  and  the  single 
gold  standard  recognized,  proclaimed,  and  understood. 
It  was  not  until  silver  was  a  cheaper  dollar  that  any* 
one  demanded  it,  and  then  it  was  to  take  advantage  of 
a  creditor. 

Now,  it  has  always  been  within  the  power  of  con- 
gress to  correct  this  error,  if  error  was  made ;  but  con* 
gress  has  refused  over  and  over  again  to  do  it.    When 


224  SIIiVER  AND  GOLD. 

the  controversy  arose  about  the  Bland  bill  and  the 
house  of  representatives  proposed  the  free  coinage  of 
silver,  the  senate  rejected  it  after  a  deliberate  contest 
and  substituted  in  place  of  it  what  is  called  the  Bland- 
Allison  act,  which  required  the  purchase  of  silver  bul- 
lion at  its  market  value  and  its  coinage  to  a  limited 
amount.  Every  effort  has  been  made  from  that  time 
to  this  to  have  the  congress  of  the  United  States  pass 
a  free  coinage  act. 

As  I  said  before,  shortly  after  the  passage  of  the 
Bland-Allison  act,  and  from  that  time  on  there  was  a 
constant  debate  going  on  in  congress,  and  finally  con- 
gress raised  the  amount  of  silver  bullion  to  be  pur- 
chased to  four  million  and  a  half  ounces  by  the  act  of 
1890.  The  question  then  was  between  the  free  coin* 
age  of  silver  and  the  purchase  of  silver  in  a  limited 
amount  to  be  coined  at  the  pleasure  of  the  government 
as  it.  was  needed.  The  same  question  is  upon  us  now 
in  the  difficulties  which  surround  us,  and  it  is  time  that 
the  question  should  be  definitely  and  finally  settled. 


8BNAT0B  WILLIAM  H.  8TSWABT.  28& 


CHAPTER  VI. 

THS  8CIBNCB  OF  HONEY— BY  8ENAT0B  WILLLIM  M. 

6TEWABT  OF  NEVADA. 

Civilization  is  created  by  making  common  to  all 
what  is  known  or  produced  by  each.  There  are  two 
inventions  of  man  which  are  essential  to  civilization, 
namely  language  and  money.  Neither  is  useful  in  iso- 
lation while  there  is  but  one  individual  to  learn  or  to 
produce. 

Spoken  and  written  language  make  acquired  knowl- 
edge accessible  to  all.  Money  commands  services  and 
all  the  products  of  labor,  and  makes  the  efforts  of  the 
whole  human  race  contribute  to  the  wants  of  each 
member  of  society.  Equally  with  language,  it  is  an 
essential  factor  of  civilization,  without  which  man 
would  soon  descend  to  the  lowest  condition  of  barbar- 
ism. 

I  am  not  aware  that  even  a  single  tribe  of  men  has 
been  discovered  which  did  not  possess  some  kind  of 
money.  The  efforts  of  barbarians  to  create  money, 
which  would  enable  them  to  enjoy  the  fruits  of  each 
other*s  labor,  are  very  instructive.  Cowrie  shells,  to 
this  day,  answer  all  the  purposes  of  local  currency 
among  certain  African  tribes;  Wampum,  made  from 
shells,  fully  possessed  the  money  function  among  the 
American  Indians ;  cattle  were  used  as  currency  in  an- 
cient Greece ;  the  money  of  Iceland  in  former  times 
was  codfish,  and  our  Anglo-Saxon  ancestors  used  slaves 
as  money. 


226  SILVER  AND  Goys^ 

• 

With  «be  aavance  of  civilization  these  various  de- 
vices are  abandoned,  either  on  account  of  their  incon- 
venience, or  because  they  are  too  abundant.  The 
more  civilized  nations  have  used  gold  and  silver  from 
earliest  history.  The  reasons  why  their  use  has  been  so 
long  continued  may  be  found  in  their  indestructibility 
and  limited  quantity.  Througliout  history  the  almost 
universal  use  of  the  precious  metals  as  money,  has 
educated  the  world  to  the  idea  that  the  precious  metals 
possess  some  intrinsic  quality  which  makes  them 
money,  and  to  overlook  the  fact  that  their  money 
function  was  given  to  them  by  Man  and  not  by  Nature. 
They  do  not  consider  the  fact  that  if^  in  the  beginning, 
there  had  been  discovered  some  other  material  more 
easily  obtained,  more  conveniently  transportable,  equally 
indestructible  and  limited  in  quantity,  gold  and  silver 
might  have  remained  commodities  without  any  detri- 
ment to  civilization. 

It  must  be  borne  in  mind  that,  at  the  time  the  pre- 
cious metals  were  first  used  as  money^  and  for  a  long 
time  afterward,  the  arts  of  making,  engraving  and 
printing  paper  were  unknown,  and  also  that  the  means 
of  limiting  the  quantity  of  money  by  law  were  very  im- 
perfect, on  account  of  the  frail  and  unstable  character  * 
of  government.  Every  civilized  government  of  modern 
times  has  given  numerous  practical  illustrations  of  the 
possibility  of  producing  paper  money  possessing  dura- 
bility, more  convenient  in  use,  and  more  cheaply  trans- 
portable than  either  gold  or  silver. 

No  fixed  system  or  rule  for  limiting  quantity  by  law 
has  yet  been  established.  This  is  the  important  ques- 
tion to  be  determined  before  the  limitation,  which  na- 
ture placed  on  the  quantity  of  ggld  and  silveri  can  bt 


8ENAT0E  WILLIAM  M.   STEWART.  227 

abandoned.  Before  discussing  the  importance  of  limi- 
tation of  the  quantity  of  money,  I  will  consider  the 
function  which  money  performs. 

Money  is  a  medium  of  exchange,  an  expression  of 
price,  and  a  measure  of  deferred  payments.  In  the 
early  stages  of  civilization  the  function  of  facilitating 
the  exchange  of  the  property  of  one  man  for  the  prop, 
erty  of  another,  and  designating  the  price  of  property 
exchanged,  were  the  most  important  uses  of  money. 
But,  at  the  present  time,  the  measurement  of  time  con- 
tracts, so  as  to  do  equity  between  debtor  and  creditor, 
is  the  paramount  consideration. 

When,  by  custom,  agreement,  or  law,  a  common  re- 
presentative of  things  useful  has  been  selected,  such 
common  representative  may  be  exchanged  for  any 
property ;  because,  by  such  custom,  agreement  or  law, 
it  is  made  representative  of  all  property.  The  repre- 
sentative of  all  property  may,  or  may  not,  be  composed 
of  material  useful  in  itself,  without  regard  to  the 
function  of  representing  other  useful  things;  but  it 
cannot  be  money,  unless  it  is  made  an  order  for  all 
things  for  sale,  by  some  law,  custom  or  understanding, 
which  the  people  observe,  either  voluntarily,  or  by  force 
of  sovereign  authority.  It  must  be  an  unquestioned 
order  or  warrant  of  attorney,  in  the  hands  of  its  owner, 
for  everything  offered  for  sale,  and  for  the  discharge  of 
all  obligations  payable  in  money. 

The  power  conferred  by  this  warrant  of  attorney,  in 
modern  times,  is  called  legal  tender ;  because  the  law 
requires  creditors  to  receive  it  in  payment  for  debts 
The  use  of  the  precious  metals  as  money,  and  the  nse^ 
at  the  same  time,  of  stamped  paper  of  no  appreciabU 
value,  have  led  to  much  confusion.    The  fact  that  the 


228  SILVEE  AND  Q^LD. 

precious  metals  have  uses,  other  than  those  incident  to 
the  representative  value  conferred  by  the  money  func- 
tion, tends  to  complicate  the  subject,  and  leads  many 
to  suppose  that  it  is  the  material  in  these  metals,  and 
not  the  money  function,  which  makes  them  valuable  as 
money. 

Neither  gold  nor  silver  can  be  used  as  a  commodity, 
and  at  the  same  time  in  its  representative  character,  as 
an  order  for  all  things  for  sale,  and  a  legal  tender  for 
the  payment  of  debts.  Anything  which  is  clothed 
with  the  money  function  of  a  dollar,  will  pay  a  debt 
amounting  to  a  dollar,  and  buy  a  dollar*s  worth  of  prop- 
erty— no  more  and  no  less — no  matter  of  what  material 
it  may  be  made.  It  is  the  money  function  which  makes 
it  a  dollar,  not  the  paper,  the  gold  or  the  silver.  If  there 
were  no  law,  custom  or  understanding,  by  which  the 
money  function  could  be  conferred  upon  anything  but 
gold  and  silver,  and  gold  and  silver  only  could  be  con- 
verted into  money  without  loss  or  charge,  the  amount  of 
gold  required  to  make  a  dollar,  would  be  worth  a  dollar, 
and  the  amount  of  silver  necessary  to  make  a  dollar, 
would  also  be  worth  a  dollar.  And  if  the  money  func- 
tion could  only  be  conferred  upon  a  certain  kind  of 
yellow  paper,  and  another  certain  kind  of  white  paper, 
and  all  such  paper,  both  the  yellow  and  the  white, 
could  be  converted  into  money  without  loss  or  charge, 
the  amount  of  yellow  paper  required  to  make  a  dollar, 
would  be  worth  a  dollar ;  and  the  amount  of  white 
paper  required  to  make  the  same  amount  of  money, 
would  also  be  worth  a  dollar,  but  the  value  of  each 
dollar  in  commodities,  would  depend  on  the  number  of 
such  dollars. 

Rude  nature,  never  has,  and  there  is  no  probability 


SENATOR  -WILLIAM  M.  STEWART.  229 

that  she  ever  will,  yield  from  the  mines  too  much  of 
either  gold  or  silver,  or  both,  for  use  as  money ;  conse- 
quently, it  has  always  been,  and  still  is,  safe  and  expe- 
dient to  confer  the  money  function  upon  all  the  pre- 
cious metals,  offered  for  that  purpose,  by  coining  them 
into  money. 

This  limitation  of  nature  is  called  the  automatic 
theory  of  money.  From  time  immemorial,  previous  to 
1878,  with  few  exceptions,  the  great  commercial  na- 
tions have  furnished  their  people  with  full  legal  tender 
money,  by  coining  all  the  gold  and  silver  deposited 
at  their  mints  for  that  purpose.  -  But  the  case  is  very 
different  where  paper  or  any  other  material,  which 
may  be  obtained  in  unlimited  quantities,  is  endowed 
with  the  money  function.  While  the  precious  metals 
were  both  used,  a  law  providing  how  much  of  each 
should  be  required  for  a  dollar,  or  other  unit  of  money, 
and  with  a  provision  for  the  unlimited  coinage  of  both, 
was  all  that  was  required.  But  where  paper  or  other 
material  of  unlimited  quantity  is  used,  the  law  must 
not  only  provide  how  paper  shall  be  converted  into 
money,  but  must  also  determine  what  quantity  of 
money  shall  be  created  from  paper.  In  the  former  case 
nature  determines  the  quantity  of  money  ;  in  the  latter 
the  quantity  must  be  determined  by  law.  In  other 
words,  in  using  paper  in  the  place  of  gold  and  silver, 
the  law  of  Man  must  be  substituted  for  the  law  of  Na- 
ture. 

The  automatic  theory,  of  limiting  the  volume  of 
coin,  by  the  quantity  of  the  precious  metals,  is  not  a 
perfect  system.  When  the  mines  are  productive,  coin 
is  more  plentiful  than  when  the  output  is  diminished 
from  exhaustion   of  the  mines  or  other  causes.    In 


280       •  SILVER   AND  GOLD. 

every  age  pf  the  world,  when  there  has  been  an  ubun- 
.  dance  of  coin,  there  has  been  prosperity  as  well ;  and, 
\  when  there  has  been  a  scarcity  of  coin  there  has  been 
'  adversity.      Thus    the   automatic   theory   works  well 
when  the  precious   metals  are  abundant,  and  badly 
when  they  are  scarce.     Tt  is  not  a  scientific  system,  be- 
cause such  a  system  would  furnish  an  adequate  supply 
of  money  li  all  times,  without  regard  to  the  accidents 
|bf  fining. 

For  1,400  years  previous  to  the  commencement  of 
the  16th  century  it  worked  badly,  because  very  little 
gold  or  silver  was  produced.  For  300  years  previous 
to  1810  the  automatic  system  worked  well,  because 
during  that  period  mines  were  reasonably  productive. 
Between  1810  and  1850,  on  account  of  the  Spanish- 
American  wars,  which  nearly  destroyed  mining,  the 
system  produced  ruinous  contraction  and  hard  times. 
From  1850  to  1873  there  was  a  copious  yield  of  the 
precious  metals,  and  the  progress  of  civilization  was 
marvelous.  In  1873  the  automatic  system  was  aban- 
doned, and  a  scheme  was  inaugurated  to  regulate  the 
volume  of  the  standard  money  of  the  world  by  gold 
alone. 

This  undertaking  has  not  been  fully  accomplished, 
but,  in  its  approach  to  consummation,  it  has  produced 
disaster.  It  was  the  most  radical  financial  revolution 
ever  undertaken  in  the  history  of  the  world,  and  one 
which,  if  finally  consummated,  must  end  in  ruin.  If 
the  automatic  theory  had  not  been  abandoned  in  1873, 
the  prosperity  of  the  preceding  twenty-three  years 
would  have  continued,  because  the  output  of  the  two 
metals  would  have  maintained  a  reasonable  supply  of 
money.     The  restoration  of  the  automatic  system,  by 


8BNATOB  WILLIAM  M.  8TEWABT.  231 

the  remonetization  of  silver,  would  secure  fiiture  pros- 
perity indefinitely,  if  the  discovery  and  development  of 
gold  and  silver  mines  should  furnish  an  adequate  pro- 
duction of  the  precious  metals. 

If  modem  civilization  is  to  be  maintained,  the 
automatic  system  must  be  restored,  or  a  more  scientific 
system  devised  and  established  in  its  stead.  Education 
and  habit  of  thought  favor  the  automatic  sj^stem, 
which,  as  we  have  seen,  consists  in  the  use  of  both 
gold  and  silver,  without  discrimination  against  either. 
The  abandonment  of  the  automatic  system  has  forced 
the  inquiry  as  to  what  necessary  functions  gold  and 
silver  perform  as  money,  which  might  not  as  well  be 
performed  by  some  other  substance. 

Since  the  arts  of  making,  engraving  and  printing 
paper  have  been  invented,  a  material  has  been  pro- 
duced, having  every  essential  quality  of  gold  and  sil- 
ver, for  use  as  money,  except  limitation  of  quantity. 
Paper  is  sufficiently  durable,  cheaper  as  to  cost  of 
transportation,  and  more  convenient  than  coin,  except 
for  small  change.  The  only  question  remaining  is,  can 
any  sure  and  safe  rule  be  ascertained  and  established 
by  law  for  the  limitation  of  quantity. 

General  prices  furnish  a  rule  or  gauge  by  which  to 
determine  whether  the  supply  of  money  is  sufficient,  or 
otherwise.  The  volume  of  money  in  circulation,  and 
all  the  property  for  sale,  are  reciprocally  a  supply  and 
demand  as  to  each  other.  If  the  average  price  of  com- 
modities is  stable,  the  proper  volume  of  money  is  in  cir- 
culation. All  authorities  agree  that  stability  in  general 
prices  is  the  end  and  aim  of  monetary  science.  Any  in- 
crease or  diminution  in  the  supply  of  money,  produces 
8  corresponding  rise  or  fall  in  general  prices.    At  the 


282  filLYEB  AND  GOLD. 

beginning  A  the  sixteenth  century,  when  mere  was 
only  about  $150,000,000  of  coin  in  circulation  in  all 
Europe,  general  prices  reached  the  lowest  level  in  his- 
tory. A  hundred  years  after  the  discovery  of  gold  and 
silver  in  Mexico  and  South  America,  the  volume  of 
metallic  money  was  more  than  quadruple,  and  prices 
greatly  advanced.  Between  the  years  1810  and  1850^ 
the  cutting  off  of  the  supply  of  the  precious  metals, 
due  to  the  Spanish-American  wars,  largely  reduced 
the  supply  of  money,  as  compared  with  property  for 
sale,  and  prices  fell  over  50  per  cent.  The  new  supply 
of  gold  from  California  and  Australia  advanced  prices, 
between  1850  and  1878,  from  18  to  25  per  cent.  Since 
1878,  the  reduction  of  the  supply  of  standard  money, 
by  the  demonetization  of  silver,  has  produced  a  fall  in 
general  prices  amounting  to  fully  50  per  cent. 

These  practical  examples  are  in  harmony  with  the 
law  of  supply  and  demand.  A  supply  of  money,  in 
excess  of  the  legitimate  demands  of  business,  is  not 
desirable,  because  it  disturbs  the  equity  of  time  con- 
tracts, and  enables  the  debtor  to  discharge  his  obliga- 
tions in  money  less  valuable  than  the  money  in  circula' 
tion  at  the  time  the  contract  was  made. 

A  constantly  increasing  volume  of  money  is  neces- 
sary to  supply  the  increased  demand,  arising  from  the 
growth  of  population  and  business.  A  decreasing  vol- 
ume of  money,  as  compared  with  the  demand,  is  dis- 
astrous* It  compels  the  debtor  to  pay  in  dearer 
money  than  he  undertook  to  pay  when  he  entered 
into  the  contract  It  discourages  enterprise,  because 
property  produced  or  acquired  by  the  investment  of 
money,  declines  in  price,  and  thus  the  probability  of 
profit  upon  any  venture  is  diminished.    When  money 


SEKATO&  WILUAM  M.   STSWABT.  288 

18  advancing  in  value,  or,  what  is  the  same  thing,  is  in- 
creasing in  purchasing  power,  the  human  instinct  of 
gain  induces  investments  in  money.  Such  investments 
are  made  by  exchanging  property  for  money,  with  a 
purpose  to  hoard  it,  or  for  bonds  and  other  credits, 
which  are  investments  in  money  futures.  Investments 
of  this  character  do  not  create  wealth,  but  absorb 
wealth  already  produced. 

When  prices  are  rising,  the  same  instinct  leads  to 
the  acquisition  of  property.  Property  is  acquired  by 
purchase,  and  by  production  which  results  from  the 
employment  of  labor.  The  employment  of  labor 
in  production  is  the  source  of  all  wealth  and 
prosperity.  Speculators  of  every  description,  includ- 
ing dealers  in  money,  in  the  language  of  Wall 
street,  *'  go  long "  on  those  things,  whether  prop- 
erty or  money,  which  are  rising  in  price  or  value,  and 
"go  short "  on  those  things  which  they  believe  to  be  on 
the  decline.  Since  the  demonetization  of  silver,  money 
has  been  appreciating  in  value,  and  the  competition  to 
acquire  reliable  money  futures  has  been  so  great  as  to 
induce  people  to  accept  very  low  interest,  in  view  of  the 
prospect  of  an  increase  in  the  purchasing  power  of 
money  invested.  The  decline  of  prices  has  been  so 
serious,  as  to  induce  prudent  men  to  go  short  on  prop- 
erty, by  declining  to  engage  in  new  enterprises,  and  by 
converting  their  property  into  money  futures.  En- 
forced idleness,  produced  by  the  enhancement  of  the 
value  of  gold,  or  what  is  the  same  thing,  the  fall  of 
prices,  has  withdrawn  the  progressive  and  the  ambi- 
tious from  productive  undertakings,  and  has  led  them  to 
seek  wealth  by  investment  in  money  futures. 

An  i^^finite  variety   of  causes  a£fect  progress  and 


234  BILYEB  AND  GOLD. 

prosperity.  Wars,  pestilence,  famine  and  bad  govern- 
ment, are  common  afflictions  of  the  human  race.  But, 
in  the  absence  of  a  known  and  great  calamity,  contrac- 
tion of  the  circulating  medium  is  the  only  instrument 
of  universal  misery.  No  form  of  civilization  or  govern- 
ment has  been  able  to  withstand  its  blighting  influ- 
ence, or  to  survive  its  long  continuance.  The  unlimited 
use  of  gold  and  silver,  under  present  conditions,  would 
rescue  the  country  from  pending  disaster,  and,  if  the 
mines  should  continue  productive,  would  secure  a  pros- 
perous future.  If,  ignoring  well  known  facts,  such  as, 
that  the  quantity  of  gold  coin  in  existence  is  constantly 
being  reduced,  through  abrasion  and  loss,  and,  that 
there  is  not  any  reasonable  prospect  of  a  future  pro- 
duction of  gold  more  than  sufficient  to  supply  the  arts, 
the  money  powers  shall  continue  to  resist  the  restora- 
tion of  the  automatic  system,  and  to  insist  that  the 
volume  of  money  of  ultimate  payment  shall  be  re- 
duced to  the  narrow  basis  of  existing  gold,  an  effort 
must  be  made  to  secure  a  more  scientific  money  system, 
which  would  dispense  with  the  use  of  the  precious 
metals  altogether. 

A  paper  money,  representative  of  all  property  for  sale, 
clothed  with  unlimited  legal  tender  quality,  redeem- 
able in  debts  and  taxes,  and  of  a  proper  volume,  would 
be  an  ideal  money.  If  such  paper  money  were  estab- 
lished, and  the  Secretary  of  the  Treasury  were  required 
to  pay  it  out  in  lieu  of  all  other  money  now  in  the 
treasury,  or  hereafter  to  be  received  ;  if  he  were  further 
required  to  destroy  all  other  paper  money  of  whatever 
description,  in,  or  to  be  in,  the  treasury ;  and  to  sell,  as 
bullion,  all  gold  and  silver  in,  or  to  be  paid  into,  the 
treasury,  and  to  replace  it  all  with  the  newly- estab- 


WILUAM  B.    ALLISON, 


^ 


X' 


^^^  or  T... 


>:i 


SENATOR   WILLIAM  M,    MEW  ART.  287 

iished  paper  money,  the  volume  of  circulatioii  in  the 
country  would,  thereby,  be  neither  increased  nor 
diminished ;  but  it  would  consist  of  a  single  circulating 
medium,  which,  to  the  exclusion  of  all  other  money, 
would  be  clothed  with  the  money  function  and  legal 
tender  power. 

Does  anybody  doubt  that  the  only  money  which  would 
pay  debts  and  taxes,  in  the  richest  country  in  the 
world,  would  be  the  best  money  ?  Every  resident,  and 
every  foreigner,  desiring  to  buy  property,  pay  debts  or 
taxes  in  this  country,  would  be  compelled  to  have  it. 
Would  not  such  a  demand  be  sufficient  ?  If  it  be  con- 
tended that  the  present  supply  of  money  is  adequate, 
it  cannot  be  maintained  that  it  will  continue  to  be  so. 
The  growth  of  population  and  business  constantly  in- 
creases the  demand  for  money  ;  and  the  supply  must 
also  be  increased  to  prevent  contraction.  The  percent- 
age of  increase  of  population  is  known,  and  a  like  per 
cent,  of  money  could  be  added,  by  covering  into  the 
treasury  a  further  amount  of  representative  paper 
money,  in  lieu  of  taxes,  and  the  paying  out  of  the  same 
for  current  expenses.  The  increase  of  business  might 
require  a  greater  percentage  of  increase  in  the  volume 
of  money,  than  the  growth  of  the  population  would  in- 
dicate. In  that  case  it  would  be  necessary  to  resort  to 
that  certain  and  reliable  gauge  of  the  volume  of  money, 
which  is  found  in  the  general  range  of  prices.  Com- 
petent  and  reliable  statisticians  might  be  employed  to 
investigate  prices,  and  ascertain  whether  general  prices 
were  rising  or  falling.  If  rising,  the  amount  of  money 
covered  into  the  treasury,  from  time  to  time,  might  be 
diminished,  and,  if  falling,  an  increased  supply  must  be 
found,  until  stability  in  general  prices  should  be  re- 
U 


288  SILYEB  AND  GOLD. 

stored  and  maintained.  It  is  the  volume  of  money 
which  regulates  general  prices,  and,  by  the  rise  and 
fall  of  general  prices,  any  excess  or  deficiency  in  the 
volume  of  loioney  in  circulation,  is  shown. 

The  reason  why  general  prices,  and  the  volume  of 
money,  respond  and  correspond  to  each  other,  is  be- 
cause the  money  in  circulation,  and  all  the  property 
for  sale,  are  reciprocally  the  supply  and  demand  for 
each  other.  The  confusion  which  exists  with  regard 
to  the  relation  between  money  and  prices,  arises  from 
a  comparison  of  isolated  articles  or  commodities,  with 
money.  The  demand  for  money  is  equal  to  the  demand 
for  all  other  things ;  because  it  is  the  universal  order 
for  property ;  but  the  demand  for  each  kind  of  prop- 
erty is  limited.  Its  value,  as  compared  with  other 
property,  and  its  price  in  money,  depend  upon  the  sup- 
ply and  demand  of  the  particular  kind  of  property. 
The  fluctuations,  in  price  or  value,  of  every  description 
of  property  in  obedience  to  the  law  of  supply  and  de- 
mand, have  no  effect  upon  the  aggregate  value  of  all 
property  offered  for  sale ;  for  that  value  is  dependent, 
solely,  upon  the  total  supply  of  money. 

Whatever  credit  devices  may  be  invented,  whether 
government  or  bank  currency,  redeemable  in  gold,  or 
private  checks,  bills  of  exchange  or  other  promises  to 
pay,  the  volume  of  the  circulating  medium  must  ulti- 
mately depend  upon  the  volume  of  money  clothed  with 
every  money  function.  Money  redeemable  in  other 
money  is  simply  a  form  of  credit.  Credit  is  limited  by 
the  means  of  payment  or  redemption.  Since  prehistoric 
times  and  up  to  the  year  1878,  the  fabric  of  credit,  in- 
cluding currency  redeemable  in  coin,  rested  on  both 
gold  and  silver.    That  part  of  the  foundation  which 


SENATOB  WILLIAM  M.   8TEWABT.  239 

consisted  of  silver,  lias  been  removed,  and  the  silver 
coin,  which  formed  at  least  one-half  of  the  base,  has 
beeu  converted  into  credit  money,  to  be  redeemed  in 
gold.  In  round  numbers,  the  gold  coin,  silver  coin  and 
paper  money  of  the  world,  are  about  equal  to  each 
other.  The  pyramid  was  firm  and  substantial  while 
gold  and  silver  were  the  base,  and  constituted  two-thirds 
of  the  fabric ;  and  while  paper,  the  apex,  represented 
only  about  one-third.  It  now  stands:  gold  coin,  one- 
third,  for  the  apex ;  and  silver  and  paper,  two-thirds, 
for  the  base ;  but  the  pyramid  is  reversed,  with  the  apex 
at  the  bottom. 

The  load  of  credit  resting  on  gold  must  be  greatly 
reduced  to  correspond  with  the  gold  standard,  and  that 
is  the  process  now  going  on,  which  has  produced  the 
current  financial  ^^  squeeze,"  and  to  which  the  authors 
of  the  ruin  point  as  an  "  object  lesson." 

The  hope  of  relief  by  increasing  debts,  or  issuing  more 
currency  redeemable  in  gold,  is  vain.  The  inflation  of 
prices,  by  issuing  paper  redeemable  in  gold,  without 
gold  for  redemption,  must  end  in  panic  and  collapse. 
It  would  be  like  attempting  a  permanent  cure  of 
delirium  tremens  by  an  increased  indulgence  in  strong 
drink.  The  grasp  of  gold  contraction  can  only  be  tem- 
porarily relieved  by  credit  devices,  as  a  patient  is  some- 
times revived  when  suffering  from  the  effects  of  alcohol- 
ism, by  a  cocktail  in  the  morning,  only  to  be  sunk  to  a 
still  lower  depth  of  depression  by  the  inevitable  reaction 
later  in  the  day.  Banks  are  the  storm  center  of  panics. 
The  squeeze  of  1893,  to  force  the  gold  standard,  pumped 
the  wind  out  of  $4,500,000,000  of  bank  credits,  based 
on  $600,000,000  of  reserves.    But  the  "  object  lesson  " 


240  SELVEB  AND  QOLD. 

has  not  silenced  the  demand  of  the  gold  trust  for  mor* 
credit  and  less  money. 

The  alternative  of  scientific  money,  of  material  other 
than  gold  and  silver,  or  the  restoration  of  the  automatic 
theory,  is  presented  to  the  creditor  class.  The  revolu- 
tion which  they  have  inaugurated  to  destroy  the  auto- 
matic theory,  must  either  be  arrested  by  the  restoration 
of  silver,  or  by  the  invention  and  establishment  of  a 
better  system. 

The  prelimi*  ary  e£Pects  of  the  gold  standard  con- 
traction, have  paralyzed  enterprise  and  destroyed  the 
the  prospect  of  future  credits*  It  is  now  destroying 
existing  obligations,  and,  when  its  deadly  work  shall 
have  been  fully  accomplished,  all  bonded  debts  will 
have  been  liquidated  by  repudiation  and  bankruptcy. 
If  blind  greed  is  to  be  the  only  guide  of  the  money 
powers  in  the  future,  as  it  has  been  in  the  past,  the  hor- 
rors of  universal  ruin  and  the  disorganization  of  society 
may  be  realized  before  the  work  of  reconstruction  can 
be  begun.  The  hope  still  exists  that  there  is  sufficient 
intelligence  in  the  masses,  to  direct  their  dormant  ener- 
gies in  a  mighty  efiFort  to  break  the  chains  of  contrac- 
tion, with  which  fraud  and  avarice  have  bound  the 
limbs  of  enterprise.  If  this  hope  may  be  realized,  the 
civilization  of  the  Nineteenth  Century  will  escape  the 
abyss  of  degradation  and  want  in  which  all  preceding 
oivilizations  have  perished. 


SENATOR  WILLIAM  B.  ALLISOK.  241 


CHAPTER  VII. 

BY  8BKAT0B  WM.  B.  ALLISON,  OF  IOWA. 

It  has  been  disclosed  to  us  that  between  1860  and 
1890  our  population  had  more  than  doubled,  notwith- 
standing in  the  mean  time  we  had  a  most  desolating 
and  devastating  civil  war.  I  was  gratified  to  learn 
that  between  1860  and  1890,  the  wealth  of  this  coun- 
try had  grown,  not  in  proportion  to  its  population,  but 
tad  grown  fourfold  in  wealth  from  $16,000,000,000  to 
•64,000,000,000. 

I  was  also  gratified  to  learn  that  during  all  this 
progress  of  development  and  growth,  the  West  and 
the  Northwest  have  been  specially  favored  in  that 
progress ;  that  the  growth  of  wheat  from  1871  to  1892, 
a  period  of  twenty -one  years,  had  increased  from  240,- 
000,000  bushels  to  611,000,000  bushels ;  that  the  South- 
ern States,  which  had  been  overrun,  as  it  were,  by 
lOur  armies^  with  devastation  in  their  pathway,  have 
MO  far  recovered  that  from  1870  to  1892  they  had  in- 
creased the  growth  of  the  great  staple  crop  of  cotton 
from  nearly  4,000,000  bales  to  more  than  9,000,000 
bales,  and  that  nearly  all  other  agricultural  products 
liad  increused  in  the  same  proportion.  I  was  also  grati- 
fied to  see  that  during  that  time  the  exchanges  in  fifty- 
ieven  cities  of  our  country  had  disclosed  the  enormous 
growth  of  $62,000,000,000  per  annum. 

It  occurred  to  me  that  the  question  which  we  ard 
now  debating  is,  in  some  of  its  aspects,  if  not  in  all| 


Mi  BQiVEB  AKD  GOI9. 

the  most  important  qaestion  which  can  engage  the  con- 
sideration of  the  American  people.  This  great  produc- 
tion, this  great  population,  energetic  and  active  as  it  is, 
all  receiving  either  wages  or  the  result  of  its  products, 
oan  not  engage  in  the  ancient  methods  of  barter.  We 
must  have  some  measure  whereby  we  can  value  these 
exchanges  and  products,  and  the  question  in  which  we 
are  engaged  is  whether  we  shall  at  this  time,  by  direct 
or  indirect  legislation,  change  the  measure  of  value  in 
which  all  these  products  are  exchanged,  and  by  which 
all  these  wages  are  measured  and  have  been  exchanged 
and  measured  since  1879,  and  under  which  all  this 
prosperity,  or  practically  all  of  it,  has  grown  up. 

It  seems  to  me  that,  in  the  discussion  of  this  ques- 
tion, it  is  our  duty,  first,  to  ascertain  exactly  what  is 
our  condition  as  respects  coinage  and  what  we  should 
propose  to  meet  it. 

We  have  had  since  1792  in  the  United  States  laws 
respecting  the  coinage  of  money  and  the  regulation  of 
its  value,  and  also  regulating  the  values  of  foreign 
coins.  It  is  due  to  the  men  who  framed  those  law9 
that  we  should  say  that  when  they  framed  them  they 
undertook — believing  as  we  believe,  that  it  is  better  to 
rest  the  measure  of  value  upon  both  metals  than  upon 
one — they  undertook  with  the  utmost  care  to  ascertain 
what?  To  ascertain  the  relative  value  of  the  two 
metals,  if  they  were  to  use  them  both  in  measuring  the 
values,  and  the  products  and  the  labor  of  our  country. 
This  could  be  done  by  one  of  two  methods,  either  to 
fix  a  ratio  between  them,  with  free  mintage  at  the  com- 
mercial ratio,  or  make  one  of  them  the  standard  of 
value  and  coin  the  other  in  limited  quantity  for  domes* 
tio  oircttlation  only.    They  chose  the  first  as  the  only 


fiEKATOB  WILLIAM  B.   ALtlSOK.  24S 

true  method.  So  careful,  history  tells  usy  were  they  in 
that  measurement  to  ascertain  the  true  ratio,  that  Alex- 
ander Hamilton,  the  then  Secretary  of  the  Treasury, 
took  1,000  minted  Spanish-milled  dollars  and  weighed 
them  in  the  scale  to  determine  the  amount  of  the  abra- 
sion which  they  had  undergone  by  means  of  circulation, 
so  as  to  ascertain  the  average  value  of  these  abraded 
dollars  in  our  own  circulation,  because  it  is  notorious 
that  our  circulation  at  that  time  was  principally  silver, 
mid  the  silver  was  chiefly  what  were  known  as  the 
Spanish-milled  dollars,  those  coined  in  Spain  and  those 
coined  in  the  Spanish  possessions  on  our  own  continent. 
After  weighing  these  dollars  the  average  was  found  to 
be  871  grains  of  fine  silver. 

In  order  to  determine  the  exact  ratio  between  silver 
and  gold — because  it  was  intended  to  use  gold  as  well 
as  silver — a  further  examination  was  had  to  ascertain 
what  other  nations  had  taken  as  the  relative  ratio  be- 
tween the'  two  metals,  silver  and  gold,  and  in  order  to 
make  that  ratio  what  they  believed  to  be  the  exact 
commercial  ratio  they  added  a  quarter  of  a  grain  to  the 
average  of  the  Spanish-milled  dollar  and  fixed  the  sil- 
ver dollar  at  871J  grains  of  fine  silver.  Upon  that 
principle,  thus  based,  they  authorized  the  mintage  of 
both  gold  and  silver. 

All  the  nations  of  Et^rope  were  then  using  either 
gold  or  silver,  with  free  mintage  of  the  standard  metal, 
or  using  both  metals  as  a  standard,  with  free  mintage. 
They  did  not  all  have  exactly  the  same  ratio,  but  the 
variations  were  slight,  and  there  was  then  a  universal 
demand  for  both  metals  at  the  mints.  Therefore,  away 
back  in  1792,  we  started  out  upon  the  idea  of  a  double 
coinage  and  a  double  measure.    Whether  that  was  wise 


244  SILVER  AND  GOLD. 

or  otherwise,  I  shall  not  now  stop  to  discuss.  That 
double  measure  and  standard,  modified  in  a  way  I  shall 
presently  speak  of,  continued  until  1873,  when  by  the 
act  which  has  been  so  often  alluded  to,  we  changed  oui 
standard  to  the  single  standard  of  gold. 

Because  the  relation  in  Europe,  as  developed  a  few 
years  afterwards,  disclosed  that  we  had  fixed  a  wrong 
ratio,  overvaluing  silver,  our  gold  left  the  country  un- 
til, as  is  stated  in  the  reports  made  to  the  house  of  rep- 
resentatives and  to  the  senate  in  1834,  there  were 
scarcely  a  half  million  dollars  of  gold  in  the  United 
States. 

It  is  stated  by  Albert  Gallatin  in  his  testimony  be- 
fore the  committee  having  that  matter  in  charge  in 
1833,  that  our  gold  appreciatively  departed  beginning 
in  1821.  But  a  further  examination  of  that  subject 
discloses  that  our  gold  commenced  departing  long  be- 
fore that ;  and  although  Europe,  during  the  period 
from  1803  to  1815,  was  desolated  by  the  allied  armies 
and  by  the  armies  of  Napoleon,  although  we  ourselves 
had  passed  through  a  war  with  Great  Britain,  it  was 
disclosed  that  gold  went  from  us  so  rapidly  that  in  1821 
the  attention  of  congress  was  called  to  the  subject.  In- 
deed I  believe  the  attention  of  congress  was  called  to 
it  as  early  as  1818. 

A  resolution  was  introduced  in  one  branch  of  con- 
gress for  the  purpose  of  remedying  the  defect  in  the 
ratio  adopted  in  1792,  and  Mr.  Gallatin,  in  his  testi- 
mony, stated  the  fact  that  Great  Britain  had  then  es* 
tablished  the  gold  standard  and  started  upon  the  path- 
way of  specie  resumption  upon  the  gold  standard.  He 
stated  that  this  demand  went  on  and  on  long  after 
Great  Britain  had  filled  her  coffers  and  her  banks  hoa^ 


8BNATOB  WILLIAM  B.  ALLISON.  245 

the  surroundiDg  nations  with  all  the  gold  that  she 
needed,  and  up  to  the  time  of  his  statement  made  in 
1833. 

The  discussion  of  the  failure  in  1792  to  make  the 
correct  ratio  led  to  a  long  discussion  for  a  change  of 
ratio.  That  change  of  ratio  was  discussed  in  these 
Houses,  and  resolutions  of  inquiry  were  adopted  ad- 
dressed  to  the  Secretaries  of  the  Treasury.  In  1829 
Samuel  D.  Ingham,  then  Secretary  of  the  Treasury, 
made  an  able  report  upon  the  subject  to  the  two  houses 
of  congress,  and,  judging  from  that  report  and  from 
his  administration  of  the  treasury,  Mr.  Ingham  was  a 
man  of  competence  in  that  high  place.  He  DAade  a  re- 
port in  which  he  stated  the  fact  that  our  gold  coins  had 
been  swept  away  from  us,  that  our  people  desired  gold, 
and  that  it  was  important,  if  we  were  to  have  gold  as  a 
part  of  our  circulation,  that  we  should  change  the  ratio. 
A  large  amount  of  testimony  of  experts,  of  men  of  the 
highest  character  and  learning  respecting  the  Irue  ratio, 
was  taken  at  that  time  and  in  subsequent  7  ears.  It 
was  shown  that  from  1803  France  had  had  the  ratio  of 
15}  to  1  and  that  other  nations  had  different  ratios;  but 
that  the  French  ratio  was  the  prevailing  one  because  of 
her  central  and  pivotal  position  in  the  trade  of  Furope* 

Whilst  Albert  Gallatin,  who  had  given  great  atten- 
tion to  the  question,  insisted  that  the  true  ratio  sliould 
be  15|  to  1,  in  accord  with  the  French  ratio,  I  believe 
that  Mr.  Ingham  insisted  the  ratio  should  be  15.625  to 
1— mark  it,  15.625  to  1,  not  16,  not  15.80,  but  15.625 
in  order  that  there  might  be  no  mistake  as  to  the  deli* 
cate  and  careful  fractions  which  should  disclose  the  true 
commercial  and  mint  ratio  between  the  two  metals. 

Otherg  insisted  that  15.80  waa  the  true  ratio^    Th^n 


246  SILVER  AND  GOLD. 

it  YfBi,s  said  that,  owing  to  the  methods  of  commuDica- 
tion  between  one  country  and  another,  and  especially 
because  we  were  in  one  continent  and  Europe  was  in 
another,  we  could  afford  to  make  a  little  variation  from 
the  exact,  truthful  ratio  which  science  had  disclosed  to 
be  the  equilibrium  between  these  great  metallic  forces 
in  the  mintage  of  the  world. 

So  I  have  no  doubt  the  idea  prevailed  that  we  could 
make  the  ratio  16  to  1,  and  that  the  shade  of  difference 
between  16.625  or  15.80  would  not  enable  other  na- 
tions to  gather  from  us  our  gold  or  our  silver,  and  we 
could  still  hold  them  both  at  a  parity  in  value  in  the 
metallic  circulation  of  our  country.  We  then  made 
the  ratio  16  to  1  upon  the  idea  that,  taking  all  things 
into  consideration,  we  could  safely  do  so,  and  that  we 
should  be  certain  to  retain  all  the  gold  and  all  the 
silver  to  which  we  were  entitled  in  making  the  ex- 
changes of  the  world  and  for  our  internal  exchanges  as 
well. 

What  was  the  result  of  that  slight  difference  between 
15.625,  and  16?  It  was  that  our  silver — which  is  the 
money  of  the  people — ^went  out  of  circulation,  and  we 
were  relegated  to  what  we  have  been  too  much  rele- 
gated recently,  the  substitution  of  one-dollar  bills  for 
the  silver  of  our  country.  The  silver  oozed  out  in  the 
course  of  commerce,  and  people  were  obliged  to  sub- 
stitute something  in  the  place  of  the  silver  dollars,  and 
one-dollar  bills  took  their  place.  So  it  is  true  that  in 
1853  there  was  practically  no  silver  money  in  the 
United  States. 

I  pause  here  to  say  that  I  have  heard  it  frequently 
stated  that,  notwithstanding  our  mints  were  open  from 
1792  to  1858,  or  1878,  if  you  please,  to  the  coinage  of 


8BKATOB  WILLIAM  B.  ALLISOK.  247 

silver,  during  all  that  period  we  only  coined  8,000,000 
silver  dollars.  All  our  fractional  coins,  half-dollars, 
quarter-dollars,  and  dimes,  were  a  legal  tender  for  any 
sum  until  1853.  One  could  have  gathered  up  the  dimes, 
the  quarters,  and  the  half-dollars  and  have  made  a  pay* 
ment  in  those  from  1792  to  1853 ;  and  of  those  coins 
there  were  nearly  $130,000,000. 

It  may  be  truthfully  said,  therefore,  that  during  all 
this  period  it  was  the  aim  and  purpose  and  effort  of  our 
people  to  utilize  both  silver  and  gold,  without  discrim* 
ination  against  either.  But  in  1853,  instead  of  chang- 
ing our  relation  to  that  of  the  commercial  nations  of 
the  world,  as  in  my  belief  we  ought  to  have  done,  and 
yielding,  as  we  ought  to  have  yielded,  to  what  was 
known  as  the  bimetallic  relation  of  France  and  of 
Europe  generally,  we  undertook  to  bridge  over  the 
situation  by  coining  fractional  dollars, "  depreciated  8 
per  cent.,  in  order  that  we  might  keep  them  here.  That 
was  in  1853.  That  was  the  time  to  have  established 
silver  permanently  in  our  circulation.  Surely  to  the 
Republican  party  can  not  be  imputed  that  mistake,  be- 
cause both  houses  of  congress  were  wholly  Demo- 
cratic. 

Our  foreign  coins  were  also  a  legal  tender  up  to  1857. 
For  the  encouragement  of  our  mints  they  were  then 
declared  to  be  no  longer  a  legal  tender.  Eighteen  hun- 
dred and  sixty  came,  and  with  it  came  the  war,  which 
lasted  four  years ;  and  with  that  war  came  a  depreciated 
paper  currency. 

So,  although  both  gold  and  silver  were  our  legal 
standards  of  money,  as  they  had  been  since  1792,  by 
the  exigencies  and  misfortunes  of  war,  both  those  met- 
als disappeared  from  our  circulation,  the  one  being  held 


248  8ILVER   AND  GOLD. 

here  to  some  extent,  and  the  least  valuable,  for  the 
purpose  of  paying  duties,  because  under  our  law  we 
had  required  the  duties  upon  imports  to  be  paid  in 
gold,  or  in  coin,  which  was  then  gold.  We  did  not  use 
the  words  "  gold  coin,"  but  we  used  the  word  "  coin." 

Gold  being  the  cheaper  metal,  of  course  remained 
here  during  the  period  of  the  war  to  execute  the  func- 
tions imposed  upon  it  by  the  statute — the  payment  of 
duties  and  the  counter  payment  by  the  government  of 
interest  upon  the  public  debt. 

Now,  I  have  gone  over  this  history  to  show  that  the 
people  of  the  United  States  during  all  this  period  fa- 
vored both  gold  and  silver ;  that  they  sought  to  estab- 
lish a  ratio  which  would  retain  both ;  that  they  did  this 
with  the  utmost  care,  dealing  in  the  minutest  fractious 
to  accomplish  the  purpose,  and  which  they  believed  to 
be  essential  for  its  accomplishment.  This  brings  us  to 
the  year  1878,  which  seems  to  be  a  sort  of  era  in  this 
great  question.  I  agree  that  it  is  so,  because,  although 
our  depreciated  paper  was  the  only  money  in  circula- 
tion, except,  as  I  have  already  stated,  for  the  payment 
of  duties  and  for  the  payment  of  interest  on  the  public 
debt,  we  dealt  with  the  coinage  law,  and  whilst  we 
were  dealing  with  it,  contemporary  almost  with  that 
dealing,  all  Europe  dealt  with  it  as  well. 

To  Europe  this  action  was  of  the  utmost  present  im- 
portance. In  the  United  States  we  were  on  a  debased 
currency,  in  1878  still  far  removed  from  specie  pay- 
ments, and  our  people  were  absorbed  in  other  questions 
and  failed  to  realize  the  ultimate  effect  of  a  change  of 
standard.  But  it  is  not  believed  that  it  was  even  then 
known  in  Germany  that  her  action  and  the  action  that 
followed  in  the  Latin  Union  would  lead  to  such  mp- 


SENATOR  WILLIAM  B.  ALLISOK.  249 

mentous  changes  in  the  future.  Germany  had  wrested 
from  France  a  thousand  millions  of  dollars  as  a  condi- 
tion of  peace.  She  had  consolidated  the  German  Em- 
pire and  made  it  one  instead  of  many  states.  All  of 
these  states  were  on  the  silver  standard.  It  was 
thought  then  to  be  a  great  stroke  as  respects  German 
unity  if  they  could  not  only  have  a  common  ruler,  a 
common  Reichstag,  but  a  common  currency,  and  that 
they  should  make  that  currency  as  distinguished  as  pos- 
sible from  every  kind  of  currency  they  had  hitherto 
held.  Therefore,  they  started  out  with  the  mark,  mak- 
ing it  the  unit  of  value,  and  making  gold  the  only 
standard  where  silver  had  been  the  only  standard  be- 
fore. 

Germany,  as  we  know,  lies  geographically  in  the 
neighborhood  of  surrounding  millions  of  industrious 
and  active  people.  Her  enemy,  France,  lies  upon  one 
side  and  Belgium  and  Italy  lie  in  between.  France, 
Belgium,  and  Italy,  the  Latin  Union  states,  had  the 
double  standard,  and  they  had  millions  upon  millions 
of  silver  under  that  double  standard.  Germany  said, 
"  This  is  our  time  to  get  rid  of  our  1500,000,000  of  sil- 
ver  and  allow  the  mints  of  the  Latin  Union  states  to 
absorb  it,  and  we  will  take  their  gold."  The  Latin 
Union  states,  alert  as  they  were,  saw  that  it  was  no 
part  of  their  policy  to  pull  the  chestnuts  out  of  the  fire 
for  Germany,  and  therefore  they  immediately  agreed 
that  they  would  coin  only  a  limited  quantity  of  silver 
instead  of  having  their  mints  open  as  they  had  been 
open  before ;  and  that  limit  of  quantity,  extending  for 
a  few  years,  developed  itself  into  the  absolute  closing 
of  the  mints  of  Europe  to  the  coinage  of  silver.  So  it 
is  at  this  day  and  hour,  and  for  fifteen  years  there  has 


250  SILYKB  AKD  GOLD. 

not  been  a  mint  open  to  the  coinage  of  full  legal  tender 
silver  in  all  the  European  states. 

Now,  I  want  to  go  into  this  history  a  little.  It  so 
happened  that  at  the  same  time  we  changed  our  unit 
of  value  from  gold  and  silver  to  gold.  The  year  1873 
is  a  starting  point,  I  agree,  in  all  these  debates  and  in 
the  question  in  our  country.  It  may  be  that  it  was  not 
known  in  1873  in  the  country  geneially  that  that 
change  was  made.  It  is  not  strange  that  it  was  not 
known,  because  at  that  time  we  were  wholly  upon  a 
paper  basis ;  but  it  is  true  that  later  on,  and  very  soon, 
it  was  thoroughly  known  in  our  country.  It  can  not 
be  assumed  that  the  men  who  studied  these  questions 
and  were  familiar  with  them  should  have  been  ignorant 
of  that  action  in  1875.  It  is  not  true  that  they  were 
ignorant  of  it  in  1876  ?  In  1876,  with  a  presidential 
election  impending  and  with  a  full  knowledge  by  the 
people  of  the  United  States  that  this  great  wrong  had 
been  committed,  if  it  was  a  wrong,  the  members  of  the 
two  houses  of  congress  then  in  session  (and  it  was  my 
fortune  then  to  be  a  member  of  the  senate)  discussed 
these  questions  over  and  over  again,  and  many  bills 
w^re  introduced  and  many  amendments  were  propose<7 
on  the  subject. 

Now,  then,  1876  came,  and  with  it  came  a  growing 
disparity  between  the  two  metals.  The  trade  doUan 
became  somewhat  plentiful  on  the  Pacific  coast,  and  at 
the  instance  of  the  Pacific  coast  and  its  representatives 
then  in  congress,  the  power  or  quality  of  carrying  sil- 
ver to  the  mint  was  taken  away  by  our  statutes,  and 
the  question  of  the  quantity  of  dollars  to  be  coined  wa» 
remitted  to  the  Secretary  of  the  Treasury^  and  ther 
they  could  only  be  coined  for  export. 


8ENAT0B  WILLIAM  B.   ALLISON.  261 

So  one  essential  quality  of  free  mintage  was  taken 
away  in  1876  and  not  in  1878,  and  at  that  time  fortu< 
nately,  or  unfortunately,  as  the  case  may  be,  one  branch 
of  congress  was  Democratic  and  the  other  branch,  the 
senate,  Republican. 

I  do  not  believe  in  the  policy  of  piling  up  buUlon  la 
the  treasury  of  the  United  States  ar.d  holding  it  there 
uncoined.  I  believe  that  that  is  a  most  dangeroua  poL 
icy  to  silver  itself.  It  is  a  menace  to  the  price  of  sil- 
ver, and  it  has  something  to  do^  in  my  judgment,  with 
the  depreciation  of  that  metal. 

When  a  bill  for  the  free  coinage  of  silver  was  intro- 
duced. Wall  street  was  frightened  and  stocks  went  down 
a  point  or  two.  In  Europe,  when  it  is  suggested  that 
we  are  going  to  sell  the  silver  in  the  treasury,  what  is 
the  effect  on  the  price  of  silver  ?  What  is  the  effect  of 
a  mere  suggestion  by  a  prominent  man  in  this  country, 
whether  he  be  in  congress  or  not,  that  the  silver  bullion 
held  in  the  treasury  of  the  United  States  should  be  sold 
for  gold?  We  have  there  now  122,000,000  ounces  of 
it.  That  would  carry  down  silver  as  rapidly  as  it  could 
h%  carried — taking  into  account  the  cost  of  its  produc- 
tion, as  rapidly  as  did  the  action  of  India.  The  more 
we  put  there  the  more  dangerous  it  is  to  silver,  unless 
We  follow  it  up  by  coining  that  silver  and  strengthen- 
ing our  gold  reserve. 

For  myself  I  am  in  favor  of  coining  every  dollar  of 
the  silver  that  is.  in  the  treasury.  It  ought  to  be 
coined.  When  I  say  that  I  do  not  mean  now,  pres- 
ently, but  it  should  be  understood  as  the  policy  of  the 
government  that  we  will  not  have  in  the  treasury  stored 
away  there  silver  bullion  for  sale. 

I  should  be  in  favor  of  coining  it  as  soon  as  practica* 


252  8ILYEB  AND  QOLD. 

ble.  It  might  be  wise  to  leave  it  for  a  short  time  for 
other  reasons  pending  action  in  concurrence  with  other 
countries.  But  I  am  for  coining  it  and  going  on  with 
its  coinage.  That  must  be  done.  Not  one  dollar  of 
that  silver  can  ever  be  sold  without  the  sanction  of 
congress,  and  that  sanction  I  am  sure  will  never  be 
given.  Therefore  as  we  pile  the  silver  up  in  the  form 
of  bullion  we  put  in  menace  the  price  of  silver  every- 
where, and  it  should  be  coined. 

There  is  another  thing  to  be  noticed.  By  the  policy 
of  1878,  which  has  not  yet  been  changed,  we  practically 
agreed  to  maintain  silver  at  par  with  gold  coin.  That 
was  a  good  pledge  to  put  into  it,  but  it  was  a  pledge 
already  involved  in  the  policy  and  in  the  law  itself. 
We  have  put  into  the  treasury  under  the  coinage  act 
of  1878  170,000,000  in  round  numbers,  not  raised  by 
taxation,  but  in  the  form  of  seigniorage  or  profit,  and 
with  that  money  we  have  purchased  4  or  4J  per  cent, 
bonds  for  every  dollar  of  it,  and  thereby  released  to 
that  extent  so  much  of  the  interest-paying  debt. 

Are  we  to  take  that  great  surplus  fund  called  seign- 
iorage from  the  men  who  have  our  silver  certificates 
and  our  silver  dollars  and  not  use  it  to  maintain  its 
parity  with  gold  ?  It  is  said  that  there  is  in  the  treas- 
ury a  seigniorage  of  $60,000,000  over  and  above  tHe 
coinage  that  is  necessary  to  redeem  the  treasury  notes 
outstanding.  If  there  is,  does  not  the  same  equity  re- 
quire that  that  seigniorage  shall  be  utilized  and  used 
to  maintain  the  parity  in  value  between  the  two  metals 
which  we  declared  positively  in  1892  we  would  main* 
tain? 

What  I  have  said,  I  think,  tends  to  show — first,  that 
«I1  history  discloses  when  a  small  divergence  is  made 


J.    STEKLINQ  MOHTON, 


SBNATOB  WILLIAM  B.   AL:  tsO-^.  255 

frDTn  the  true  commercial  ratio,  the  result  is,  whatever 
your  established  ratio  by  statute,  you  are  upon  the 
ratio  which  represents  the  overvalued  money.  We 
must  not  forget  that  the  commercial  ratio  is  fixed  by 
the  demand  for  silver  as  moneys  that  demand  having 
been  greatly  diminished  by  legislation  in  Europe.  Tt 
must  be  restored  by  the  same  method  and  through  the 
same  processes, 

I  undertake  to  say  that  it  is  absolutely  impossible 
for  us  to  deal  with  the  question  of  ratio  at  this  time 
on  any  bill.  A  ratio  of  27  to  1  or  28  to  1  would  be  an 
unwise  ratio ;  for^  with  silver  fluctuating  20  cents  in  r. 
single  day,  how  can  you  make  a  ratio  that  will  be  a 
just  ratio  7 

The  moment  the  resolution  of  the  Tndian  council 
stopping  the  free  coinage  of  sflver  was  adopted  away 
up  on  the  mountain  slope  of  the  Himalayas,  and  was 
telegraphed  to  London  and  to  New  York,  silver  bullion 
went  down  25  per  cent.  Then  it  went  up  15  per  cent, 
in  the  next  week.  Can  we  make  a  ratio  which  will 
measure  all  values  and  all  debts  and  all  credits  on  the 
basis  of  a  fluctuating  value  like  that?  To  merely 
state  the  proposition  is  to  show  its  impossibility* 

In  1876,  when  the  price  of  silver  bullion  went  down, 
it  was  noted  as  one  of  the  reasons  why  it  went  down 
that  England  was  selling  council  bills  at  the  rate 
of  $75,000,000  per  annum  upon  India,  payable  in 
rupees. 

Here  is  India,  which  is  the  entrep6t  to  the  Orient,  so 
far  as  its  trade  is  concerned.  Here  is  the  trade  be- 
tween India  and  China  and  the  strait  Settlements,  and 
the  region  round  about — without  going  over  them  all 
«»-wiuoh  amounts  to  $1,000,000,000  per  annum.  I  dp 
16 


£56  SILVEB  AND  GOLD. 

not  mean  their  internal  trade*  but  I  mean  foreign  trade, 
oC  purchase  and  sale  between  countries  who  trade  with 
each  other  to  the  extent  of  $1,000,000,000>  computed 
in  gold  at  the  present  price  of  silver. 

Here  is  this  91,000,000,000  of  external  trade  com- 
puted at  the  present  depreciated  prices,  all  of  it  sold  in 
countries  on  a  silver  basis,  and  all  of  it  sold  since  2877 
upon  a  fluctuating  exchange  bearing  upon  the  price  of 
^Iver. 

England,  in  addition  to  that,  demanded  from  India 
£15^000,000  in  exchange  in  the  form  of  council  bills, 
and  by  that  means  she  prevented  Tndia  from  absorbing 
the  silver  irrhich  she  would  naturally  absorb,  and  which 
she  did  absorb  prior  to  1873  when  the  par  was  dislo- 
cated. So  these  council  bills  came  in,  and  while  we 
bought  4,500,000  ounces  of  silver  a  month  England 
practically  sold  9,000,000  ounces  per  month.  During 
all  these  years  while  we  bought  silver  she  sold  silver, 
or  its  equivalent,  in  the  form  of  council  bills,  and  aliie 
goes  into  the  markets  of  London  with  these  council 
bills  in  competition  with  silver  bullion,  and  thereby 
bears  it  down  if  she  chooses,  and  reduces  the  exchange 
by  selling  the  council  bills  at  a  lower  rate  than  the 
bullion  price  of  silver.  She  can  do  that.  Then  the 
bullion,  price,  goes  down,  betcause  the  silver  bullion 
gathered  at  London  is  the  silver  bullion  that  goes 
chiefly  to  China  and  to  India. 

The  stocks  of  gold  in  the  banks  of  Europe  and  in 
the  United  States  aggregate  £809,000,000,  or  f  l,500r 
000,000. 

I  do  not  know  how  much  of  that  is  held  for  war  re* 
«erve,  bat  it  is  well  known  that  France,  Germany,  and 
Brussia  have  .large  reserves  of  gold,  the  two  former  an 


flXNATOB  WILLIAM  B.  ALLISOH.  S5T 

»moa«]^i  lai^  beyond  any  necessity  of  maintaining  at  par 
their  paper  money.  It  is  well  understood  that  they 
have  strengthened  these  reserves  preparatory  to  the 
contingency  of  war,  and  that  Russia,  although  wholly 
on  a  paper  basis,  has  lately  added  very  largely  to  her 
holdings  of  gold,  and  I  have  no  doubt  a  large  sum  is 
held  in  the  countries  I  have  named,  not  to  maintain  the 
par  of  paper  money,  but  for  war  purposes. 

That  all  the  great  interests  of  this  world  can  be 
carried  on  by  the  use  of  gold  alone  as  standard  money 
is,  to.  my  mind,  impossible.  I  believe  that  the  $8,500,- 
000,000  of  full  legal  tender  silver  money  in  the  world 
will  continue  to  be  legal  tender  money,  and  I  believe 
that  the  $165,000,000,  or  whatever  may  be  the  amount 
which  we  have  now  in  the  United  States  of  full  legal 
tender  silver  money,  will  so  continue.  We  have  in  the 
United  States  to-day  one-sixth  of  the  coin  legal  tender 
silver  money  of  the  world,  and  yet  it  is  said  that  we 
are  in  favor  of  the  single  standard  of  gold.  The  single 
standard  of  gold  is  impossible,  whether  we  favor  it  or 
object  to  it.  This  98,500,000,000  of  full  legal  tender 
silver  money  will,  in  my  belief,  remain  as  legal  tender 
money. 

It  may  be  true  that  the  business  of  the  world  can  be 
carried  on  with  units,  whether  silver,  gold,  paper*  But 
I  am  speaking  now  of  the  general  situation  as  it  is  now, 
with  debts  as  they  are,  obligations  as  they  are,  property 
as  it  is,  currency  as  it  is,  and  all  the  relations  of  civil* 
ized  countries  as  they  are.  With  these  conditions  re- 
maining, both  gold  and  silver  must  be  used. 

I  wish  to  say  a  few  words  regarding  my  belief  as  to 
the  heat  way  of  dealing  with  the  present  situation.  I 
beBeve  the  way  to  deal  with  it  is  to  deal  with  it  as  w# 


258  SXLYBR  AND  GOLD. 

deal  with  other  things ;  that  is,  to  deal  with  the  peoples 
whoy  like  ourselves,  are  interested  in  the  subject.  Here 
are  88,500,000,000  of  full  legal  tender  silver  money  in 
the  world.  I  will  not  say  every  dollar  of  it  is  full 
legal  tender,  but  most  of  it  is  full  legal  tender  money 
with  less  bullion  in  it  than  the  bullion  in  the  coins  of 
the  United  States.  This  money  is  scattered  through- 
out the  whole  of  Europe.  It  permeates  every  bank 
and  every  business  relation  of  Europe ;  it  leads  into  all 
their  debts,  into  all  their  credits,  into  all  their  transac- 
tions. Are  not  these  people  interested  with  us  in  the 
rehabilitation  of  silver? 

We  have  heard  it  said  that  this  country  of  ours  is  big 
enough  and  strong  enough  to  deal  with  all  these  ques- 
tions independently  and  without  the  concurrence  of 
other  nations. 

It  is  said  we  should  not  engage  in  agreements  respect- 
ing this  subject.  Why  not?  There  is  not  to-day  a 
civilized  nation  on  the  face  of  the  globe  with  which  we 
Have  not  agreements  about  every  conceivable  thing  re- 
lating to  commerce.  We  have  made  treaties  over  and 
over  again  about  matters  related  to  our  commerce  and 
our  trade. 

We  were  persuaded  to  engage  in  a  convention  with 
European  powers  respecting  the  situation  of  Congo  in 
Central  Africa,  and  we  followed  to  the  early  recogni- 
tion of  the  flag  of  a  private  association,  which  associa- 
tion was  afterwards  turned  into  the  State  of  Congo  and 
following  this  we  have  made  most  valuable  treaties  with 
all  the  European  nations  with  respect  to  the  trade  of 
Central  Africa.  We  have  made  over  and  over  again 
treaties  whereby  we  agree  that  certain  articles  should 
oome  into  the  United  States  at  certain  rates  of  duty 


V  . .     .  V 


ii 


^•Jl;  i  V  -^  -■ 

•tNATOR  WILLIAM  B.  kUA^I^^' ,   ^  ^^^^ 

tlpon  the  condition  that  certain  other  articles  ffouriHs 
country  should  go  into  those  countries  at  certain  other 
rates  of  duty,  and  yet  there  is  in  the  congress  of  the 
Unite'd  States,  under  the  Constitution,  power  only  to 
levy  and  c(tllect  taxes  and  imports.  That  was  done 
long  before  any  provision  concerning  reciprocity  was 
inserted  in  what  is  known  as  the  McKinley  tariff 
act. 

We  made  a  few  years  ago  a  most  important  treaty 
with  Groat  Britain,  submitting  to  arbitration  a  single 
question  relating  to  the  seal  fisheries  in  Bering  Sea,  and 
selected  two  of  the  most  eminent  men  of  our  country, 
Senator  Morgan,  of  Alabama  and  Associate  Justice 
Harlan,  of  the  Supreme  Court,  as  arbitrators  on  the 
part  of  the  United  States. 

This  great  tribunal  reached  a  wise  solution  of  this 
difficult  question.  But  this  solution  involved  not  only 
arrangements  between  the  two  countries  but  with  other 
commercial  countries. 

Our  statutes  and  our  treaties  are  full  of  illustrations, 
and  yet  it  is  said  the  dignity  of  this  country  is  im- 
perilled if  we  treat  with  other  nations  as  respects  the 
common  measure  of  value  which  shall  make  all  inter- 
national exchanges  of  products  and  fix  a  ratio  between 
the  precious  metals  which  shall  utilize  both  metals  in 
making  these  exchanges.  We  have  seen  the  fluctua- 
tions which  have  made  unstable  all  exchanges  with 
silver-using  countries,  and  have  only  lately  seen  that 
by  the  action  of  India,  a  foreign  country,  our  silver 
producers  have  had  their  product  fall  in  a  single  day 
20  cents  per  ounce,  to  recover  again  12  cents  per  ounce 
in  a  few  days,  when  that  would  have  been  impossible  if 
we  had  had  i  iternatto^al  action  on  the  sQbjeo^* 


KO  SILVER  AKD  GOLD. 

No  more  important  commercial  arrangement  can  be 
made  than  that  which  will  secure  the  common  use  by  ^ 
commercial  nations  of  both  gold  and  silver  as  interna* 
tional  money. 

Is  it  of  no  importance  to  the  State  of  Colorado  and 
the  surrounding  mineral  States  to  say  that  the  Indian 
council  on  the  Himalayan  Mountains  can  affect  the  value 
of  their  property  to  the  extent  of  20  cents  upon  each 
dollar  of  production  ?  Is  not  that  worth  dealing  with 
foreign  nations  about,  if  thereby  these  great  changes 
can  be  avoided  ? 

But  it  is  now  stated  that  because  we  propose  to  deal 
with  this  question  internationally,  we  are  belittling  the 
American  Republic.  There  is  no  greater  question  tot 
the  people  of  this  world  than  the  question  of  money ; 
there  is  no  question  which  affects  more  deeply  all  the 
trade  of  all  the  nations  than  the  question  of  money 
Therefore  there  is  nothing  that  should  so  engage  thf 
attention  of  commercial  and  civilized  nations  as  thaf 
question. 

A  statement  made  by  the  Secretary  of  the  Treasury 
in  1830, 1  think  clearly  presents  the  importance  of  this 
question,  showing  that  this  is  not  a  new  suggestion. 

It  is  House  of  Representatives  Executive  Document 
No.  117,  Twenty-fii*st  Congress,  first  session,  dated 
May  4,  1830.  The  then  Secretary  of  the  Treasury 
said: 

**A  conventional  agreement  among  the  principal 
commercial  nations  of  the  world  which  desire  to  use 
both  gold  and  silver  as  standards  of  value,  fixing  the 
vame  relative  values,  might  avert  such  consequences." 

That  is  the  consequence  of  one  or  the  other  metal 


M^AtOk  WILUAM  H.  ALLI80K.  1161 

going  out.    The  Secretary  was  showing  that  gold  was 
going  oat. 

^  But  the  regulation  of  the  coins  of  a  country  is 
regarded  as  a  high  attribute  of  sovereignty ;  and  until 
higher  objects  of  ambition  shall  overcome  the  folly  of 
maintaining  mere  dignity  at  the  expense  of  public  good 
it  is  not  to  be  hoped  that  such  a  measure  would  be 
favorably  considered.'* 

What  he  stated  as  wise  for  the  nations  had  been  prac- 
tically adopted  by  the  European  states  centuries  be- 
fore; namely^  to  adjust  the  ratio  between  the  two 
metals  in  each  state,  so  as  to  conform  as  nearly  as  pos- 
sible to  the  commercial  ratio  prevailing  in  the  sur- 
rounding states.  This  was  done  by  Locke  in  1666,  and 
fifty  years  later  by  Sir  Isaac  Newton,  although  both 
these  great  men  believed  that  the  unit  of  value  should 
be  based  on  silver,  that  metal  being  least  liable  to  fluc- 
tuation as  compared  with  gold. 

Now,  in  this  year,  with  these  perturbations  in  the 
price  of  silver,  with  one  set  of  nations  in  the  Oiieut 
with  their  thousand  millions  of  commerce  with  each 
other  and  with  the  nations  of  Europe  and  the  United 
States,  and  with  their  exchanges  now  at  a  discount  of 
from  40  to  60  per  cent  measured  in  gold  and  fluctuating 
every  day  in  the  markets  and  exchanges  of  the  world, 
dealing  in  products  which  we  are  bound  to  use,  and 
which  we  see  upon  our  tables  every  day,  with  no  house 
so  humble  that  it  does  not  have  daily  upon  its  table 
some  of  their  productions — dealing  with  those  people, 
as  we  are,  upon  these  great  commercial  questions,  why 
is  it  that  there  should  not  be  between  us  and  them  a 
common  measure  of  value?  Yet  that  proposition  is 
whistled  down  the  wind  by  statesmen  in  congress. 


262  SILVER   AND  GOLD. 

A  suggestion  has  been  made  respecting  the  confer- 
ence at  Brussels.  I  wish  to  say  that  in  1878  we  put 
into  a  statute  a  provision  that  there  should  be  a  con- 
ference of  nations  with  a  view  to  a  common  ratio  with 
free  mintage  at  such  rates.  The  conference  failed,  al- 
though the  princi[)le  was  agreed  to.  An  examination 
of  the  text  of  the  resolutions  adopted  by  the  confer- 
ence of  1878  will  show  that  they  declared  it  was  a  de 
sirable  thing  for  the  nations  of  the  world  to  use  both 
gold  and  silver  as  money  measures  of  value. 

It  is  my  belief  that  if  this  government  will  under- 
take the  policy  of  international  arrangement  regarding 
silver  and  gold,  that  policy  will  be  accomplished,  and 
within  a  reasonable  period  we  will  be  able  to  restore 
the  parity  between  the  two  metals,  and  practically  re- 
habilitate silver.  This  is  my  belief,  and  that  is  the 
permanent  and  wise  solution  of  this  question.  In  the 
meantime,  it  seems  to  me,  we  shall  have  to  drift  along 
as  best  we  may,  purchasing  from  time  to  time  and  coin- 
ing all  tho  silver  that  we  can  use  in  our  domestic  cir- 
culation maintaining  the  parity,  and  I  have  no  doubt 
we  can  absorb  a  considerable  amount  beyond  that 
which  we  now  have.  My  belief  is  that  if  we  are  to 
have  an  international  agreement,  we  must  make  it  ap- 
pear to  the  nations  of  the  world  that  we  alone  do  not 
mean  to  take  care  of  silver.  That  is  the  salient  point. 
There  are  men  in  Europe  of  the  highest  character  who 
read  every  speech  which  is  made  in  congress,  and  who 
gather  their  opinions  from  our  public  documents,  who 
believe  that  sooner  or  later  the  government  of  the 
United  States  will  go  to  free  coinage  and  thus  relieve 
them  from  their  situation,  and  relieve  us  of  our  gold 
as  well,  and  this  is  a  constant  hindrance  to  an  agree- 


SENATOR  WILLIAM  B.   ALLISON.  268 

meuL    The  recent  action  of  India  will  only  hasten  tb 
consideration  of  the  subject  hy  all  the  nations,  whethc  •; 
they  use  gold  alone,  or  both  gold  and  silver. 

I  am  not  thoroughly  familiar  with  public  opinion  in 
Europe  upon  this  question  ;  but  I  have  no  doubt  that 
the  public  opinion  of  Europe  is  that  a  conference  of 
nations  should  assemble  and  deal  with  this  question. 
and  when  I  say  that  I  do  not  exclude  Great  Britain. 
All  these  nations  are  deeply  interested  in  the  subject. 
They  can  not  afford  any  more  than  can  we  to  have 
silver  obliterated.  There  are  more  than  $1,200,000,000 
of  full  legal  tender  silver  in  circulation  in  Europe,  and 
they  are  interested,  as  we  are,  in  placing  this  silver  on 
a  par  with  gold  in  international  exchanges. 

It  has  been  said  that  England  is  against  us  because 
she  is  a  creditor  nation.  Those  who  have  studied  the 
tendency  of  public  opinion  know  that  many  of  the 
most  influential  Englishmen  in  public  life  and  in  the 
universities  believe  in  what  we  call  bimetallism ;  that 
is,  the  fixing  of  a  ratio  between  the  two  metals  whereby 
there  shall  be  free  mintage  in  concurrence  by  the 
commercial  nations.  There  is  a  silver  party  in  En- 
gland, and  it  is  a  strong  party  and  a  growing  party, 
and  in  my  belief,  when  opportunity  is  given,  will  be 
a  triumphant  party,  favoring  the  utilization  of  silver 
as  well  as  gold. 

It  may  be  that  those  enjoying  annuities,  those  hay- 
ing long  investments,  will  cling  to  the  opinions  and 
views  as  expressed  by  Mr.  Gladstone,  but  it  is  cer- 
tain that  nearly  all  the  men  engaged  in  commerce 
and  in  the  manufacturing  industries  of  Great  Britain, 
and  all  the  great  agricultural  interests  of  Great 
Britain — these  three  great  productive  classes  of  Great 


{64  SILVER  AND  GOLD. 

Britain — are  to-day  in  favor  of  utilizing  silver  and 
gold. 

It  has  been  demonstrated  over  and  over  again  by 
Mr.  Balfour,  by  Prof.  Foxhall,  by  Mr.  Grenfell,  and  by 
other  writers,  many  in  number,  that  the  creditor  in- 
terests of  England  are  not  to  be  damaged  by  the  union 
of  the  two  metals,  that  it  will  so  revive  the  trade  of 
the  world  and  the  business  of  the  world  as  to  overcome 
and  overbalance  all  that  may  come  to  a  few  annuitants 
or  interest-receiving  people  as  respects  the  great  credits 
of  England,  and  in  addition  their  investments  will  be 
made  more  secure. 

So  I  state  here  as  my  belief  that  if  we  will  have 
patience  upon  this  question  and  deal  with  it  in  a  states* 
manlike  way,  as  was  proclaimed  by  Mr.  Ingham  more 
than  fifty  years  ago ;  if  we  will  dismiss  from  our  minds 
our  prejudices  and  our  party  leanings  and  deal  with  it 
as  a  great  question  involving  our  country  in  its  in- 
tegrity and  in  its  interests,  we  shall  soon  see  the  time 
when  silver  and  gold  will  travel  side  by  side.  I  have 
no  idea  that  the  accidental  production  of  $100,000,000 
of  silver  now  as  against  f 50,000,000  of  gold,  or  $100,- 
000,000  of  gold  hereafter  against  $50,000,000  of  silver 
weighs  as  a  thread  in  the  balance.  It  is  not  the  over- 
production  or  underproduction  of  these  metals  that  af- 
fects them.  There  is  lying  behind  the  silver  in  its  path- 
way now  nearly  $4,000,000,000,  of  silver  that  is  only  a 
local  currency,  and  that  in  a  sense  drags  down  the 
annual  production  of  our  mines. 

Thus  believing,  I  know  of  no  interest  in  the  United 
States  that  can  possibly  favor  the  suggestions  which 
have  been  made  which  lead  to  a  silver  standard  and 
which  will  bring  a  silver  standard.    Surely,  it  Is  not 


SfiKATOR  WlLLtAM  B.   ALLI80K.  265 

the  purpose  of  those  who  want  a  silver  standard,  or 
^ho  want  to  rehabilitate  silver,  to  change  the  measure  of 
Value  of  all  the  things  we  consume,  of  all  the  wages  of 
labor,  of  all  production,  of  the  relations  of  debtor  and 
ireditor,  whatever  thej  may  be,  since  1880,  if  you 
please,  when  the  large  debts  were  incurred.  Shall  it 
be  said  that  we  favor  the  scaling  down  of  debts? 
Shall  it  be  said  that  the  $6,500,000,000  of  railroad 
bonds  shall  be  scaled  down? 

When  you  come  to  the  question  of  debts  of  twenty 
years  ago  they  are  very  few  indeed.  It  is  stated  by 
those  who  have  examined  the  subject  that  debts  on 
the  average  are  only  nine  months  old.  I  appeal  to  the 
experience  of  any  business  man.  How  does  he  manage 
to  continue  to  have  the  same  creditor  for  a  period  of 
twenty  years?  These  changes  come  and  go  as  the  tides 
come  and  go.  The  railroads  that  have  borrowed  $6,- 
500,000,000,  it  is  said,  and  mortgaged  their  railways, 
never  expect  to  pay  a  dollar  of  it,  except  in  the  form 
of  a  renewal  of  those  mortgages. 

Those  mortgages  are  as  much  a  part  of  the  system 
of  railways  in  every  country  on  the  face  of  the  globe  as 
are  the  cars  or  the  engines.  As  their  6  percent. invest- 
ments mature,  if  the  rate  of  interest  is  lower  they  re- 
fund the  loans ;  and  so  it  goes  on  and  on  forever,  with 
increasing  celerity  and  activity  as  respects  railroads. 
So  with  the  business  men  of  our  country,  our  savings 
banks,  our  manufacturers,  our  farmers,  our  producers. 
Debts  created  this  year  or  five  years  ago  are  paid  to- 
day. They  are  paid  by  a  new  loan  at  a  reduced  rate  of 
interest  or  in  some  other  form  by  accumulation  of  earn- 
ings. If  you  go  back  thousands  of  years  it  is  found 
that  the  reason  originally  or  one  of  the  great  reasons, 


266  STLVKR  AND  GOLD. 

vrhy  silver  and  gold  are  stable  reletiveljas  respects  the 
quantity,  that  whatever  fluctuations  or  changes  there 
might  be,  or  depreciation  or  appreciation  in  value  of 
the  metals,  would  be  such  an  appreciation  or  deprecia- 
tion as  would  spread  itself  over  a  series  of  years  and 
thus  do  no  harm  to  anybody. 

You  may  take  silver  and  gold  outside  of  their  use  as 
money  and  they  are  worth  very  little  in  comparison,  al- 
though it  is  said  now  that  one-half  of  the  current  pro- 
duction of  gold  is  used  in  the  arts;  but  for  this  pur- 
pose alone  there  is  an  accumulated  supply  which  would 
last  for  fifty  years.  I  have  no  doubt  that  more  than 
that  is  so  used,  and  it  is  for  that  reason,  among  others, 
that  I  believe  it  will  be  only  a  short  period  before  there 
will  be  a  full  rehabilitation  of  both  metals. 

So  believing,  and  believing  that  the  industrial  inters 
ests  of  this  country,  its  wage-earners,  its  farmers,  its 
producers  in  every  section  and  every  State  of  the  Union 
will  be  injured  by  transferring  ourselves  suddenly  from 
the  standard  of  money  upon  which  all  our  obligations 
have  been  made  and  all  their  arrangements  are  being 
perfected  is  a  mistake,  and  a  mistake  greatly  to  their 
injury. 


HOH.  J.  STEBUKO  MOBIOir,  267 


CHAPTER  Vm. 

BT  HON.  J.  STERLING  HOBTOK,  SBOBBTABT  OF  AOBI- 

OULTUBB. 

• 

When  one  declares :  **  I  am  in  favor  of  the  free  coin- 
age  of  silver  at  the  ratio  of  sixteen  to  one,''  does  he 
not  admit  that  he  is  a  gold  monometallist  ?  Is  not  the 
^one  "  spoken  of  in  his  declaration  a  gold  unit? 

The  farmers  of  the  United  States  evolve  from  the 
earth  by  hard  labor  all  cereals,  fruits  and  other  food. 
The  prices  of  these  products  are  determined  by  the  re- 
lation of  the  supply  to  the  demand  for  them.  Fanners 
have  never  called  upon  the  legislative  power  of  the 
government  to  establish  remunerative  prices  for  the  re- 
sults of  their  labor.  The  miner  and  smelter,  by  the 
same  sort  of  ei^ertion,  evolves  from  the  earth  silver  bul- 
lion ;  and  why  should  the  people  evoke  for  him  the  au- 
thority of  law  to  establish  far  his  product  an  artificial 
price?  Conscientiously  a^d  consistently,  for  many 
years,  many  citizens  have  antagonized  a  protective 
tariff,  because  /t,  by  law,  pats  an  artificial  price  on  the 
things  they  have  to  buy ;  and  it  seems  now  as  though 
the  same  citizens  ought  to  oppose  the  free  coinage  of 
silver  at  the  ratio  of  16  to  1,  because,  by  law,  it  puts  an 
artificial  price  on  silver.  When  silver  bullion  is  selling 
at  less  than  70  cents  per  ounce  on  the  market,  its  free 
coinage  inio  412}-grain  dollars,  which  are  made  a  legal 
tender  for  all  debts  public  and  private,  forces  it  upon 
the  |>eoii>l'^  at  the  rate  of  $1.29  per  ounce.     Therefore, 


268  STLVEB  AKD  GOLD. 

Is  not  the  free  coinage  of  silver  at  the  ratio  of  It)  to  1 
the  application  of  the  protective  tariff  principle  to  do* 
mestic  affairs?  Ought  not  all  those  who  heretofore  an- 
tagonized the  protective  system  also,  by  the  same  rea- 
soning, to  antagonize  the  free  coinage  of  silver? 

Why  should  any  good  citizen  advocate  a  monetary 
system  which  will  compel  the  gold  miner  to  dig  until 
he  has  secured  100  cents*  worth  o£  that  metal,  at  its 
bullion  value,  before  he  can  demand  a  dollar  for  the 
same  ;  and  will  at  the  same  time  allow  the  silver  miner 
a  dollar  for  every  50  cents*  worth  of  silver  bullion  that 
he  gets  out  ?  The  farmer  never  gets  a  dollar  for  60 
cents'  worth  of  wheat.  Why  then  should  he  advocate 
the  free  coinage  theories  by  which  the  miner  or  owner 
of  silver  bullion  is  to  receive  more  than  a  dollar  for 
everv  50  cents'  worth  of  that  metal  ?  Is  not  the  free 
coinage  of  silver,  as  proposed  to-day,  a  scheme  for  plac- 
ing a  premium  upon  mine  labor  and  mine  products, 
whilh  farm  labor  and  farm  products  must  pay? 


Itexl^Js^ 


BON«  JOHN  DALSSEUu  2G9 


CHAPTER  DL 

Br  ]iOK.  JOfCK  DAIiZBLL  OF  PENKSYLTAKIA* 

I  ASSUME  in  the  first  place  that  almost  every  one,  ex« 
cept  the  free  silver  men,  who  are  really  monometallists, 
is  desirous  of  seeing  both  gold  and  silver  the  standard 
money  of  the  commercial  nations  of  the  world ;  that 
almost  all  are  in  favor,  in  other  words^  of  international 
bimetallism.  But  as  ive  can  not  now  a&  this  time  have 
that,  it  :s  material  to  be  borne  in  mind  that  the  Ameri- 
can congress  may  not  legislate  internationally ;  but  may 
legislate  simply  for  the  United  States  of  America.  And 
it  is  material  to  be  borne  in  mind  also  that  our  existing 
monetary  system  does  not  conform  to  the  monetary 
system  of  any  other  commercial  nation  at  the  present 
time. 

The  year  1878,  when  silver  was  demonetized,  marked 
a  revolution  in  monetary  history.  In  the  results  of 
that  revolution  all  the  commercial  nations  of  Europe 
acquiesce.  We  alone  dissent.  Except  jin  silver  stand- 
ard countries,  ours  are  the  only  mints  that  are  open  to 
the  coinage  of  silver. 

Now,  whether  it  was  wise  to  dempnetize  silver,  how 
silver  was  •  demonetized,  whether  surreptitiously  or 
openly,  are  questions  which  have  no  fertinence  in  this 
discussion  except  for  the  purposes  of  declamation.  ^*  It 
is  a  condition,  and  not  a  theory,  that  confronts  us.*' 
The  question  is,  can  the  United  States,  single-handed 
and  alone,  remonetize  silver  under  existing  conditions? 


'270  SILVER  AKO  QOIA 

I  shall  DOt  stop  to  discuss  ratios  for  this  reason  ?  If 
you  can  fix  the  commercial  ratio  of  that  which  is  a 
commodity  in  the  world  in  relation  to  gold  by  law  you 
can  fix  it  at  anything  you  please.  If  you  can  not  by 
law  fix  its  real  relation  because  it  is  a  commodity,  then 
it  does  not  make  any  difference  what  ratio  yoa  put  in 
your  law.  Now,  what  is  this  proposition  for  free  and 
unlimited  coinage  of  silver?  Reduced  to  terms  of  plain 
English  it  is  this:  That  every  man  who  has  56  cents' 
worth  of  standard  silver  may  go  to  the  United  Slates 
mint  and  have  it  marked  a  dollar.  ^'  Resolved,"  it  is 
proposed  we  shall  say,  ^^  that  56  is  equal  to  100 ;  that 
1  is  equal  to  28.52." 

It  is  declared  that  the  gold  dollar  is  a  **  dishonest 
dollar;"  and  not  an  absolute  measure  of  value.  No- 
body claims  that  gold  is  an  absolute  stable  measure  of 
value.  What  we  do  plaim  and  what  is  true  is  that  it  is 
the  most  stable  measure  of  value.  It  is  the  measure  of 
value  all  over  the  world.  It  fixes  the  value  even  ii 
silver-standard  countries.  Now,  on  what  basis  is  it  as- 
sumed that  gold  hr>3  gone  up  and  that  silver  remains 
stationary?  Because  there  are  so  many  commodities 
that  have  fallen  in  price  and  silver  has  fallen  in  price 
with  them,  auji,  therefore,  gold  has  gone  up  and  silver 
has  not  moved.  Was  there  ever  a  more  patent  noti 
sequitur  f 

We  do  not  need  to  imagine  a  scarcity  of  gold  to  ac* 
count  for  falling  prices.  New  processes,  improved  ma* 
chinery,  inventive  genius,  new  facilities  for  intercom- 
munication-^these,  and  not  the  scarcity  of  gold,  are  the 
causes  of  falling  prices.  The  records  of  the  Patent 
Office,  the  roll  of  the  great  captains  of  industry  w  hose 
genius  has  weaded  usefulness  and  beauty  and  che<.p- 


GROVER  CLEVELAND 


HON.  JOHN  DALZEIiL.  273 

ness,  and  made  the  luxury  of  the  past  the  conyeuience 
of  the  predent,  refute  your  silly  claim  that  gold  is  the 
only  factor  in  fixirg  price. 

Raw  matenak,  food  products,  have  fallen  in  price 
upon  the  same  principle.  New  fields  have  been 
opened,  their  soil  put  under  the  plow.  Civilization  has 
pushed  its  resistless  march  into  new  territory,  discov- 
ered new  secrets  of  nature,  opened  new  mines  to  the 
sunlight,  bridged  new  stieam^ii,  built  highways  to  the 
hitherto  inaccessible ;  introduce!^  electricity  and  steam ; 
annihilated  time  and  space. 

The  history  of  our  trunk-line  railroads  furnishes  the 
key  to  falling  prices.  In  1865  the  Pennsylvania  Rail- 
road Company  and  its  lines  wesc  of  Pittsburg,  the  New 
York  Central  and  Hudson  River  Railroad,  the  Lake 
Shore  and  Michigan  Southern^  the  Michigan  Central, 
Boston  and  Albany,  the  New  York,  Lake  Erie  and 
Western,  carried  11,161,701  tons  of  freight,  or  to  ex- 
press it  in  another  way,  moved  of  tons  1  mile  1,654,- 
324,000.  And  how  much  did  each  ton  cost  for  car- 
riage ?  It  cost  2.9  cents  per  mile.  In  1885,  twenty 
years  afterwards,  this  same  system  of  railroads  moved 
of  tons  at  the  rate  of  1  mile  11,331,806,000,  at  a  cost  of 
six-tenths  of  a  cent  a  mile. 

Now,  these  railway  lines  carried  somewhat  less  than 
one-fourth  of  the  tons  moved  1  mile  in  1885  ;  yet  they 
saved  on  the  difference  between  cost  of  carriage  in  1885 
and  the  cost  of  carriage  in  1865,9256,500,000.  I  might 
pursue  this  line  of  argument,  to  show  the  same  results, 
with  other  roads,  but  it  is  not  necessary.  And  yet,  in 
the  face  of  incontrovertible  facts  like  these,  people  get 
up  ingenious  schedules  to  prove  that  silver  has  re- 
mained  statiouarv  and  that  gold  has  gone  up. 
16 


274  SILVER  AND  GOLD. 

Why,  the  characteristic  feature  of  this  day  is  low 
price  of  necessaries  and  high  wages.  If  the  low  pr  » 
of  necessaries  is  due  to  the  scarcity  of  gold,  why  b/  ee 
not  wages  gone  down  also  ? 

The  fall  in  the  price  of  silver  is  easily  accounted  for 
on  the  very  simplest  of  economic  principles.  Inci&ase 
the  supply  of  any  commodity,  decrease  the  demnud, 
and  prices  go  down.  Now,  since  1878,  wh^i  silver  was 
demonetized,  the  production  of  silve^rlias  increased  150 
per  cent.,  and  the  demand  has  decreased  by  the  amount 
theretofore  called  for  by  the  mints  of  Europe,  since 
that  time  closed  against  it  like  our  own,  except  since 
1878.  Since  1878,  when  silver  was  demonetized,  gold 
production  has  constantlj'^  increased,  and  is  increasing 
to  day.  The  probabilities  are  that  it  will  continue  to 
increase  to  a  much  greater  extent  in  the  future* 

In  1887  the  Queen  of  England  appointed  a  royal 
commission  to  inquire  into  the  recent  changes  in  the 
relation  of  the  precious  tnetals  to  each  other.  In  the 
same  year  President  Cleveland  appointed  Edward  At- 
kinson, a  distinguished  statistician,  to  inquiie  as  to  the 
feasibility  of  bimetallism  by  international  agreement. 
Mr.  Atkinson  states  the  results  of  the  investigation  of 
that  royal  commission  as  follows.    He  says  r 

**  I  find  in  it  abundant  evidence  sustaining  the  posi- 
rions  which  I  have  taken  to  wit : 

1.  The  mass  of  gold  in  existence  has  been  su£Scient 
to  enable  Germany  to  adopt  the  gold  standard  of  legal 
tender,  the  United  States  and  Italy  to  resume  specie 
payment  substantially  on  a  gold  standard,  the  Latin 
Union  to  gease  silver  coinage  and  to  maintain  their  ex- 
isting stock  of  legal  tender  silver  at  par  iii  gold,  with- 
out creating  any  apparent  scarcity  of  gold  and  without 


HON.  JOHN  DALZISLL.  2T6 

any  spedal  influence  in  depressing  the  prices  of  com- 
modities or  services. 

^^  2.  The  reduction  in  the  price  of  commodities  has 
been  no  greater  than  would  be  warranted  by  and  might 
have  been  expected  from  the  improvements  in  the 
processes  of  production  and  distribution.  This  reduc- 
tion, having  been  accompanied  by  a  general  mainte- 
nance or  rise  in  the  price  or  rate  of  wages,  has  been  al- 
most wholly  beneficial,  temporary  hardsliip  to  special 
classes  being  admitted." 

Our  friends  on  the  other  side  say,  ^'  discontinue  the 
use  of  silver;  take  it  out  of  the  world's  money,  and 
you  necessarily  appreciate  gold  to  that  extent*'* 

What  I  have  already  said  refutes  the  assertion.  We 
have  seen  that  the  gold  supply  has  kept  pace  with  the 
gold  demand,  and  promises  to  continue  to  do  so  in  the 
future.  This  has  been  proven  by  the  statistics  of  gold 
production,aud  by  the  evidence  taken  before  the  Royal 
Commission. 

But  in  addition  to  this  the  free  coinage  argument 
wholly  ignores  the  function  of  credit  in  our  modern 
business  life.  The  volume  of  money  consists  not 
simply  of  gold  and  silver  and  autliorized  issues  of  notes, 
but  of  credit  also.  This  is  an  expanding  and  contract- 
ing instrument  as  the  necessities  of  trade  and  commerce 
demand.  It  serves  to  conduct  from  90  to  95  per  cent. 
of  the  world's  business.  It  has  been  well  said,  the 
progress  of  civilization  is  toward  diminishing  instead  of 
iuerMsing  the  requirement  of  large  amounts  of  bullion. 

Much  stress  has  been  laid  by  our  friends  on  the  other 
side  on  the  injustice  of  making  the  debtor  pay  in  dearer 
money  than  that  which  he  borrowed.  If  I  have  proven 
anything  so  far  I  have  demonstrated  that  the  only 
method  to  prevent  such  injustice,  so  far  as  it  can  be 


276  8ILVEB  AND  GOLD. 

prevented,  is  to  abide  by  the  most  stable  of  all  meas- 
ures of  value,  gold.  And  mark  jou  the  injustice  to  the 
debtor  of  paying  his  debt  in  dearer  money  than  he  bor- 
rowed is  no  greater  than  the  injustice  of  making  the 
lender  take  his  loan  in  money  which  is  less  valuable 
than  that  which  he  loaned. 

That  aspect  of  the  question  seems  not  to  have  pre* 
sented  itself  to  our  friends  on  the  other  side  at  all. 
They  assume  that  all  lenders  are  rich,  millionaires, 
goldbugs,  corporations,  and  that  all  the  borrowers  are 
poor  farmers,  and  that  such  being  the  case  it  is  no  harm 
for  the  latter  to  cheat  the  former.  Is  there  one  rule  of 
honesty  for  the  rich  man  and  another  rule  of  honesty 
for  the  poor  man  ? 

I  have  been  amused  in  listening  to  the  self-styled 
champions  of  the  poor  man,  advocates  of  the  million- 
aire mine-owners  of  the  west,  denouncing  millionaires; 
in  one  breath  denouncing  all  moneyed  institutions,  ag- 
gregations of  wealth,  and  corporations — ^the  indices  of 
national  prosperity — and  in  the  next  demanding  a  mar- 
ket for  the  product  of  the  western  mines  and  for  the 
surplus  silver  of  the  world.  Why  not  the  same  kind 
of  legislation  for  the  steel  billeto  from  the  mills  of 
Pennsylvania,  for  the  pig  iron  from  the  furnaces  of 
Tennessee,  or  the  wheat  from  the  fields  of  Dakota  ?  It 
seems  to  me  that  this  indiscriminate  denunciation  of 
wealth,  this  arraying  of  the  rich  against  the  poor,  is 
nothing  more  or  less  than  incipient  anarchy.  Whence 
can  it  lead  but  to  a  war  of  classes  and  the  eventual 
overthrow  of  the  State  ?  And  is  not  he  an  incendiary, 
against  whom  society  has  a  right  to  protect  itself,  who 
raises  the  banner  of  rule  or  ruin  and  appeals  to  the 
basest  passions  of  mankind  ? 


HOK.  JOB»   ^ALIBLL.  277 

The  silver  men  pretending  to  be  bimetallists  are 
mononietallists.  What  they  would  have  is  not  a  double, 
but  a  silver  instead  of  a  gold  standard.  This  is  plainly 
to  be  gathered  from  the  address  of  a  well-known  advo- 
cate of  free  coinage,  whom  I  quote : 

**  If  a  single  standard  were  really  more  desirable  than 
a  double  standard,  we  are  not  free  to  choose  gold  and 
would  be  compelled  to  select  silver.  *  *  *  If  bimetal- 
lism is  impossible,  then  we  must  make  up  our  minds  to 
a  silver  standard." 

And  then  he  paints  the  glories  of  a  silyer  standard. 
He  says : 

*^  A  silver  standard,  too,  would  make  us  the  trading 
center  of  all  the  silver-using  countries  of  the  world, 
and  these  countries  contain  far  more  than  one-half  of 
the  world's  population.     What  an  impetus  would  be 

fiven  to  our  western  and  southern  seaports,  such  as 
an  Francisco,  Galveston,  New  Orleans,  Mobile,  Savan* 
nah  and  Charleston." 

That  is  to  say,  let  us  cut  loose  from  England  and 
France  and  Germany— from  European  civilization— 
and  cast  in  our  lot  with  India,  China,  the  Straits,  Japan, 
Mexico,  and  South  and  Central  America. 

Truly  a  suggestion  worthy  the  mind  that  conceives 
it  to  be  in  the  power  of  legislation  to  reverse  the  rules 
of  arithmetic. 

I  want  to  say  that  the  moment  yon  declare  that  56 
cents'  worth  of  silver  is  equal  to  a  gold  dollar,  that  mo- 
ment you  open  your  mints  to  all  the  silver  of  the  world. 
Tou  bid  it  welcome  to  come,  and  it  will  come ;  and 
when  it  comes  gold  will  go,  go  into  silver  purchases,  ^ 


S78  STLTEtt  AND  GOLD. 

into  hiding,  go  abroad.  Witli  what  result  ?  With  the 
result  to  defeat  the  very  purpose  for  which  free  and 
unlimited  silver  coinage  is  urged  ;  with  the  result  sud- 
denly and  violently  to  contract  instead  of  incrense  the 
circulation.  The  American  dollar  will  buy  in  foreign 
exchange  just  as  much  as  and  no  more  than  the  bullion 
in  it  is  worth.  The  United  States  will  be  on  a  silver 
basis. 

Two  things,  I  grant,  the  free  and  unlimited  coinage 
of  silver  will  accomplish.  First,  debtors  will  be  enabled 
to  scale  their  debts  to  the  extent  of  from  40  to  50  per 
cent,  and  cheat  their  creditors  to  that  extent;  and, 
secondly,  you  will  furnish  a  market  for  the  silver  mines 
of  the  west.  But  these  results  will  be  accomplished  at 
the  price  of  justice  and  to  the  eternal  disgrace  of  the 
American  name. 

I  believe  in  bimetallism,  the  use  of  both  gold  and  sil- 
ver as  the  standard  money  of  the  world,  and  I  expect 
to  see  that  system  come  in  time.  I  believe  that  bimet- 
allism is  possible,  however,  only  by  international  agree- 
ment, and  I  am  in  favor  of  every  honest  effort  to  bring 
about  that  agreement.  The  United  States  having  been 
on  a  gold  basis  substantially  for  sixty  years  past,  debts 
have  been  contracted  on  that  basis,  and  prices  fixed  all 
over  the  world  on  that  basis.  I  am  opposed  to  any 
measure  that  would  either  suddenly  or  gradually  put 
us  on  a  silver  basis.  I  am  in  favor  of  any  needed 
measure  for  the  expansion  of  the  currency  that  will 
put  behind  every  dollar  issued  the  guaranty  that  it 
shall  be  equal  in  purchasing  and  in  debt-paying  power 
to  every  other  dollar. 

I  believe  that  this  is  a  question  which  rises  above  the 
plane  of  party  politics.    This  question  can  be  settled^ 


ttOi^.   JOHN   DALZELL.  279 

bat  it  must  be  settled  b}'  each  man  in  the  domain  of 
conscience  enlightened  by  patriotism.  The  interests  at 
stake  involve  the  financial  future  of  this  great  people  ; 
they  are  the  interests  of  country,  and  country  is  above 
all. 


280  SILVER  AND  GOLD. 


CHAPTER  X. 
PRESIDENT  Cleveland's  LSTTEai. 

Earli  in  the  month  of  April,  1895,  a  committee  ol 
Chicago  gentlemen  invited  President  Cleveland  to  be 
present  and  take  part  in  a  meeting  ^'  in  the  interest  of 
sound  money  and  wholesome  financial  doctrine."  lu 
his  letter  declining  the  invitation,  the  President  said : 

^*  My  attachment  to  this  cause  is  so  great  and  I  know 
so  well  the  hospitality  and  kindness  of  the  people 
of  Chicago  that  my  personal  inclination  is  strongly  in 
favor  of  accepting  your  flattering  invitation,  but  my 
judgment  and  my  estimate  of  the  proprieties  of  my 
official  place  oblige  me  to  forego  the  enjoyment  of  par- 
ticipating in  the  occasion  you  contemplate. 

*'  I  hope,  however,  the  event  will  mark  the  beginning 
of  an  earnest  and  aggressive  effort  to  disseminate 
among  the  people  safe  and  prudent  financial  ideas. 
Nothing  more  important  can  engage  the  attention  of 
patriotic  citizens,  because  nothing  is  so  vital  to  the  wel- 
fare of  our  fellow-countrymen  and  to  the  strength, 
prosperity  and  honor  of  our  nation. 

"The  situation  we  are  confronting  demands  that 
those  who  appreciate  the  importance  of  this  subject  and 
those  who  ought  to  be  the  first  to  see  impending  dan- 
ger should  no  longer  remain  indifferent  or  overKJonfi- 
dent. 

"  If  the  sound-money  sentiment  abroad  in  the  land  is 
to  save  us  from  mischief  and  disaster  it  must  be  crys« 


PRVSIDISNT  CLEVELAND'S   LETTKB.  281 

tallized  And  combined  and  made  immediately  active.  It 
is  danguTOiiB  to  overlook  the  {sLct  that  a  vast  nnmber  ol 
our  people,  with  scant  opportunity  thus  far  to  examine 
the  question  in  all  its  aspects,  have  nevertheless  been 
ingeniously  pressed  with  specious  suggestions  which  in 
this  time  of  misfortune  and  depression  find  willing  lis- 
teners, prepared  to  give  credence  to  any  scheme  which 
is  plausibly  presented  as  a  remedy  for  then*  unfortunate 
condition. 

^*  What  is  now  needed  more  than  anything  else,  is  a 
plain  and  simple  presentation  of  the  argument  in  favor 
of  sound  money.  In  other  words  it  is  a  time  for  the 
American  people  to  reason  together  as  members  of  a 
great  nation  which  can  promise  them  a  continuance  of 
protection  and  safety  only  so  long  as  its  solvency  is  un« 
suspected,  its  honor  unsullied  and  the  soundness  of  its 
money  unquestioned.  These  things  are  ill  exchanged 
for  the  illusions  of  a  debased  currency  and  groundless 
hope  of  advantages  to  be  gained  by  a  disregard  of  fi- 
nancial crevlit  and  commercial  standing  among  the  na- 
tions of  the  world. 

^*  If  our  people  were  isolated  from  all  others  and  if 
the  question  of  our  currency  could  be  treated  without 
regard  to  our  relations  to  other  countries  its  character 
would  be  a  matter  of  comparatively  little  importance. 
If  the  American  people  were  only  concerned  in  the 
maintenance  of  their  life  among  themselves  they  might 
return  to  the  old  days  of  barter  and  in  this  primitive 
manner  acquire  from  each  other  the  materials  to  supply 
the  wants  of  their  existence.  But  if  American  civili- 
zation were  satisfied  with  this  it  would  abjectly  fail  in 
its  high  and  noble  mission. 

M  In  these  xeatless  days  the  farmer  is  tempted  by  tbi 


282  6ILVBR  AND  GOLD, 

asauratioe  that,  though  our  currency  may  be  debased, 
redundant  and  uncertain,  Buch  a  situation  will  improve 
the  price  of  his  products.  Let  us  remind  him  that  lie 
must  buy  as  well  as  sell ;  that  his  dreams  of  plenty  are 
shaded  by  the  uncertainty  that  if  the  price  of  the 
things  he  has  to  sell  is  nominally  enhanced,  the  cost  of 
the  things  he  must  buy  will  not  remain  stationary ; 
that  the  best  prices,  which  cheap  money  proclaims,  are 
unsubstantial  and  elusive,  and  that  even  if  they  were 
real  and  palpable  he  must  necessarily  be  left  far  behind 
in  the  race  for  their  enjoyment. 

"  It  ought  not  to  be  difficult  to  convince  the  wage- 
earner  that  if  there  were  benefits  arising  fi'om  a  degen- 
erated currency  they  would  reach  him  least  of  all  and 
last  of  all.  In  an  unhealthy  stimulation  of  prices  an 
increased  cost  of  all  the  needs  of  his  home  must  long 
be  his  portion,  while  he  is  at  the  same  time  vexed  with 
vanishing  visions  of  increased  wages  and  an  easier  lot. 
The  pages  of  histoi*y  and  experience  are  full  of  this  les* 
son. 

**  An  insidious  attempt  is  made  to  create  a  prejudice 
against  the  advocates  of  a  safe  and  sound  currency  by 
the  insinuation,  more  or  less  directly  made,  that  they 
belong  to  financial  and  business  classes  and  are  there- 
fore not  only  out  of  sympathy  with  the  common  people 
of  the  land,  but  for  selfish  and  wicked  purposes  are 
willing  to  sacrifice  the  interests  of  those  outside  their 
circle. 

**  I  believe  that  capital  and  wealth,  through  combina- 
tion and  other  means,  sometimes  gain  an  undue  advan- 
tage ;  and  it  must  be  conceded  that  the  maintenance  of 
a  sound  currency  may,  in  a  sense,  be  invested  with  a 
greater  or  less  importance  to  individuals  according  U) 


PBEStDENT  CLEVELAI^t)  1^  LfiiTTlBB.  288 

their  condition  and  circumstances.  It  is,  however,  only 
a  difference  in  degree,  since  it  is  utterly  impossible  that 
uny  one  in  our  broad  land,  rich  or  poor,  whatever  may 
be  his  occupation,  and  whether  dwelling  in  a  center  of 
finance  and  commerce  or  in  a  remote  corner  of  our  do- 
main, oan  be  really  benefited  by  a  financial  scheme  not 
alike  beneficial  to  all  our  people,  or  that  any  one  should 
be  excluded  from  a  common  and  universal  interest  in 
the  safe  character  and  stable  value  of  the  currency  of 
the  country. 

**  In  our  relation  to  this  question  we  are  all  in  busi- 
ness, for  we  all  buy  and  sell,  so  we  all  have  to  do  with 
financial  operations,  for  we  all  earn  money  and  spend 
it.  We  cannot  escape  our  interdependence.  Merchants 
and  dealers  are  in  every  neighborhood,  and  each  has  its 
shops  and  manufactories.  Wherever  the  wants  of  man 
exist  business  and  finance  in  some  degree  are  found,  re- 
lated in  one  direction  to  those  whose  wants  they  supply 
and  in  another  to  the  more  extensive  business  and  fi- 
nance to  which  they  are  tributary.  A  fluctuation  in 
prices  at  the  seaboard  is  known  the  same  day  or  hour 
in  the  remotest  hamlet.  The  discredit  or  depreciation 
in  the  financial  centers  of  any  form  of  money  in  the 
hands  of  the  people  is  a  signal  of  immediate  loss  every- 
where. 

^*  If  reckless  discontent  and  wild  experiment  should 
sweep  our  currency  from  its  safe  support  the  most  de 
fenseless  of  all  who  suffer  in  that  time  of  distress  and 
national  discredit  will  be  the  poor  as  they  reckon  the 
loss  in  their  scanty  support,  and  the  laborer  and  work- 
ingman  as  he  sees  the  money  he  has  received  for  his 
toil  shrink  and  shrivel  in  his  hand  when  he  tenders  it 
for  the  necessaries  to  supply  his  humble  homQ« 


284  •  SILVER   iiND  GOLB. 

*^  Disguise  it  as  we  may,  the  line  of  battle  is  drawn 
between  the  forces  of  safe  currency  and  those  of  silver 
monometallism.  I  will  not  believe  that  if  our  people 
are  afforded  an  intelligent  opportunity  for  sober  second 
thought  they  will  sanction  schemes  that,  however 
cloaked,  mean  disaster  and  confusion,  nor  that  they 
will  consent,  by  undermining  the  foundation  of  a  safe 
currency,  to  endanger  the  beneficent  character  and 
purposes  of  their  government.    Yours  very  truly, 

**6eovbb  Clbveland,*' 


WILLIAM  J.  BBYAN'8  BEPLT*  285 


CHAPTER  XI. 

WILLIAM  J.  BBTAK'S  BEPLT. 

The  President's  letter  drew  forth  a  storm  of  protests 
from  the  silver  men,  and  Hon.  William  J.  Bryan,  of 
Nebraska,  promptly  addressed  the  following  letter  to 
the  President : 

**  The  Han.  Oraver  Cleveland^  Frerident. — Dear  Sib  : 
In  your  recent  letter  declining  an  invitation  to  attend 
the  Chicago  *  gathering  in  the  interest  of  sound  money/ 
you  say:  *What  is  now  needed  more  than  anything 
else  is  a  plain  and  simple  presentation  of  the  argument 
in  favor  of  sound  money.' 

"To  *  a  vast  number  of  our  people  *  *  Coin's  Finan- 
cial School '  seems  to  be  ^  a  plain  and  simple  presenta- 
tion of  the  argument  in  favor  of  sound  money/  but 
some  of  your  friends  have  not  been  pleased  with  the 
argument.  Since  you  secured  the  unconditional  repeal 
of  the  Sherman  law  you  have  very  properly  taken  the 
place  so  long  held  b**  the  author  of  that  law,  Senator 
Sherman,  and  are  now  the  acknowledged  leader  of  tlie 
gold-standard  advocates  of  the  United  States,  botli 
Democratic  and  Republican,  and  to  you,  therefore,  as 
the  leader  of  that  element,  the  people  naturally  look 
for  *a  plain  and  simple  presentati(»n  of  the  argument  in 
favor  of  sound  money,'  according  to  your  understand* 
ing  of  sound  money,  or  at  least  for  an  intelligent  defi- 
tiition  of  it. 

"  What  do  you  mean  by  the  phrase  ^  sound  money '  ? 


286  SILVEB  AND  GOLD. 

Id  your  letter  you  make  frequent  use  of  that  and  kin. 
dred  phrases.  In  fact,  in  the  course  of  your  letter  yon 
speak  three  times  of  *  sound  money/  twice  of  a  *  safe 
currency,'  once  of  a  *  sound  currency,*  once  of  a  *  safe 
and  sound  currency,'  once  of  ^  safe  and  prudent  fiuan^ 
cial  ideas,'  and  once  of  ^  wholesome  financial  doctrine.' 
You  also  speak  once  of  a  ^debased  currency,'  once  of  a 
Regenerated  currency,'  and  once  of  ^  cheap  money.'  In 
one  place  you  describe  yOur  opponents  as  *  the  forces 
of  silver  monometallism,'  but  you  nowhere  explain 
what  you  mean  by  *  sound  money,'  or  what  you  con- 
sider *  cheap  money.' 

"  Now,  everybody  favors  *  sound  money  '  and  *  a  safe 
currency,'  and  a  plain  and  simple  statement  of  what 
you  mean  by  those  euphonious  and  universally  admired 
phrases  might  dispel  the  war  clouds  and  make  a  ^  line 
of  battle '  unnecessary.  If  by  *  sound  money '  you 
mean  a  gold  standard  why  did  you  avoid  the  use  of  the 
word  '  gold '  in  your  letter  ?  If  by  a  *  safe  currency ' 
you  mean  bimetallism  why  did  you  avoid  the  use  of  the 
word  of  *  bimetallism  '  in  your  letter?  Your  letter  no- 
where contains  a  direct  reference  either  to  the  gold 
standard  or  to  bimetallism,  but  is  quite  replete  with  ex- 
pressions which  may  mean  a  great  deal  or  nothing,  ac- 
cording to  the  interpretation  placed  upon  them. 

^^  Your  opponents  have  always  given  you  credit  for 
courageously  defining  your  position  on  public  ques- 
tions. Will  you  prove  their  confidence  well  founded 
by  stating  frankly  what  kind  of  a  financial  system  we 
shall  enjoy  if  the  sound-money  sentiment  abroad  in  the 
land  ^  succeeds  in  saving  us  from  mischief  and  disaster.' 
Your  opponents  candidly  avow  their  purpose  and  clearly 
outline  the  legislation  which  they  desire.    Is  it  not 


WILLIAM  J.   BRYAN'S  BEPLT.  287 

to  ask  that  you  define  your  policy  with  as  much  frank- 
ness? 

**  Your  opponents  favor  the  free  and  unlimited  coin- 
age of  gold  bullion  into  dollars,  each  containing  25.8 
grains  of  standard  gold.  Are  you  in  favor  of  this? 
Your  opponents  are  in  favor  of  the  free  and  unlimited 
coinage  of  silver  bullion  into  dollars,  each  containing 
412.5  grains  of  standard  silver.  Are  you  in  favor  of 
this?  If  not,  are  you  in  favor  of  the  coinage  of  silver 
bullion  into  dollars  of  any  size  ?  If  not  in  favor  of  tlie 
free  coinage  of  silver,  what  charge,  if  any,  would  you 
make  for  coinage  ?  If  you  are  not  in  favor  of  the  un- 
limited coinage  of  silver,  what  limit  would  you  sug- 
gest? 

"  Your  opponents  not  only  believe  in  the  restoration 
of  the  free  and  unlimited  coinage  of  both  gold  and  sil- 
ver at  the  present  rate  of  sixteen  to  one,  but  they  are 
in  favor  of  taking  this  action  at  once  without  waiting 
for  the  aid  or  consent  of  aiiy  other  nation  on  earth. 
Do  you  agree  with  them  ?  If  not,  do  you  favor  the 
restoration  of  bimetallism  by  international  agreement  ? 
If  you  are  in  favor  of  an  international  agreement,  what 
ratio  would  you  advise  and  what  nations  are  in  your 
opinion  necessary  to  such  an  agreement  ?  If  you  favor 
an  international  agreement,  how  long  are  you  willing 
to  wait  for  it  ?  Your  opponents  are  in  favor  of  making 
standard  gold  coin  and  standard  silver  coin  equally  a 
legal  tender  for  all  debts,  public  and  private,  and  are 
opposed  to  making  a  silver  dollar  a  promise  to  pay  a 
gold  dollar  or  a  gold  dollar  a  promise  to  pay  a  silver 
dollar ;  do  you  agree  with  them  ? 

"  Your  opponents  believe  that  the  free  and  unlimited 
coinage  of  gold  and  silver  at  the  present  ratio  of  16  to 


288  BILYBB  AMD  GOLD. 

1  by  the  United  States,  regardless  of  the  action  of  other 
nations,  will  give  us  sound  money  and  a  ^safe  cur* 
rency.'  They  not  only  believe  this,  but  they  support 
their  position  by  arguments  so  plausibly  presented  that 
even  you  are  frightened  into  the  belief  that  ^  the  sound 
money  sentiment  must  be  crystallized  and  combined 
and  made  immediately  active '  in  order  to  prevent 
their  success  at  the  polls.  Can  you  define  your  posi- 
tion so  clearly  and  defend  it  so  plausibly  as  to  scare 
your  opponents  as  badly  as  they  have  scared  you  ?  Is 
the  failure  of  the  gold-standard  advocates  to  define 
their  purposes  and  defend  their  financial  system  due  to 
lack  of  knowledge  of  the  subject  or  to  aii  unwilling- 
ness to  let  the  people  know  what  they  intend  ?  If  '  the 
proprieties '  of  your  *  official  place  oblige  *  you  *  to 
forego  the  enjoyment '  which  you  would  derive  from 
the  Wilting  of  another  letter  explaining  your  last  letter 
and  defining  your  position  on  the  financial  question 
please  designate  some  one  who  has  authority  to  speak 
for  you  so  that  the  people  may  be  '  afforded  an  intelli- 
gent opportunity,'  as  you  suggest,  to  study  and  decide 
this  now  paramount  public  question. 

"  Yours  very  truly, 


WILLIAM  J.    BEYAN, 


HON.  JUUtTB  O.  BUFB0W8.  291 


CHAPTER  XII.    • 

BT  HON.  JULIUS  0.  BUBROWS,  OF  HICHIQAK. 

Coin  silver  dollars  at  the  ratio  of  16  to  1  or  20  to  1 
and  you  have  a  dollar  intrinsically  worth  less  than  the 
gold  dollar,  and  coin  such  a  dollar  as  that — permit  the 
owners  of  silver  bullion  to  bring  to  the  mints  of  the 
United  States,  and  have  manufactured  into  dollars,  a 
certain  number  of  grains,  worth  in  bullion  much  less 
than  after  they  are  coined,  is  a  proposition  to  which  I 
cannot  give  my  assent. 

But  it  has  been  stated  and  repeatedly  asserted  that 
the  present  silver  dollar  is  the  "  dollar  of  the  fathers.** 
That  statement  is  not  true.  It  is  not  the  ^^  dollar  of 
the  fathers,"  and  the  fathers  if  living  would  repudiate 
such  an  assumption  as  a  reflection  upon  their  integrity 
and  sagacity.  The  silver  dollar  of  the  fathers  was  in- 
tended to  be  and  was  in  fact  practically  equal  to  the 
gold  dollar  in  intrinsic  value. 

When  Hamilton  and  the  men  of  his  time  were  con- 
sidering the  establishment  of  the  United  States  mint,  in 
1792,  the  question  presented  was  whether  we  should 
coin  silver  or  gold,  or  both,  and  haviDg  determined  to 
utilize  and  coin  both  gold  and  silver  the  only  remain- 
ing question  was  just  how  much  silver  should  be  put  in. 
the  silver  dollar  and  how  much  gold  in  the  gold  dollar, 
and  it  was  agreed  on  all  hands  there  must  be  just  such 
an  amount  put  into  the  silver  dollar  and  the  gold 
dollar  as  wou^d  make  them  exactly  equal  in  com* 
17 


292  SILVEH  AND  GOLD. 

mercial  value,  for  there  was  no  man  living  at  that  time 
outside  a  mad  house  who  entertained  the  idea  that  you 
could  coin  dollars  of  unequal  intrinsic  value  and  make 
them  circulate  side  bj  side  in  any  monetary  system. 
For  it  is  a  law  as  old  as  monetary  science  and  as  inex- 
c  rable  as  the  moving  of  the  spheres  that  if  you  have 
two  dollars  of  unequal  value  the  cheaper  will  be  the 
only  one  that  will  circulate  and  the  more  valuable  will 
be  driven  out  of  circulation. 

Mr.  Baring  said  upon  this  subject :  "  A  very  slight 
difference  of  one  tenth  or  one  quarter  of  1  per  cent, 
would  determine  the  use  of  one  metal  or  the  other*" 

Our  own  history  demonstrates  the  truth  of  this  law. 
Under  the  ratio  of  15  to  1,  established  in  1792,  the  two 
coins  separated  in  a  few  years,  because  it  was  found 
that  the  commercial  value  and  the  monetary  value  did 
not  correspond,  and  gold  went  out  of  circulation  and 
our  coined  silver  was  the  only  money  remaining  in  cir- 
culation. In  1834  the  ratio  was  changed  to  16  to  1, 
but.it  was  soon  discovered  that  the  commercial  ratio 
did  not  then  correspond  with  the  monetary  ratio  and 
the  result  was  that  silver  was  more  valuable  than  gold, 
and  went  out  of  circulation,  while  gold  became  our 
only  circulating  metallic  money.  When  the  owner  of 
871 J  grains  of  pure  silver  could  get  more  for  that  silver 
uncoined  than  he  could  by  having  it  coined  into  a  silver 
dollar,  certainly  he  would  not  take  it  to  the  mint  of  the 
United  States  to  have  its  value  lessened  by  being 
coined  into  money.  So  silver  dollars  went  out  of  cir- 
culation. 

In  1861  we  were  flooded  with  a  depreciated  paper 
currency  less  valuable  than  either  gold  or  silver,  and 
the  result  was  that  it  drove  both  gold  and  silver  out  of 


HON.  JULIUS  G.  BUBBOWS.  298 

circulation,  and  they  remained  out  of  circulation  until 
we  resumed  specie  payments  in  1879. 

This  people  have  not  forgotten  the  battle  for  the  re- 
sumption of  specie  payments,  and  they  do  not  care  to 
repeat  that  experience.  It  was  a  long  journey,  fraught 
with  hardship  and  disaster  to  many  individuals,  and 
had  to  be  pursued  in  the  face  not  only  of  Democratic 
opposition  demanding  the  repeal  of  the  resumption  act 
and  the  continued  non-payment  of  our  unredeemed 
promises,  but  parties  sprang  up  in  favor  of  fiat  money 
and  the  wildest  financial  vagaries  which,  for  the  time 
being,  threatened  the  credit  and  financial  integrity  of 
this  nation.     Must  we  fight  that  battle  over  again  ? 

This  contest  for  the  free  coinage  of  silver  began  in 
1874,  and  it  has  been  prosecuted  with  uncefising  vigor 
ever  since.  Why  ?  Up  to  that  time  the  silver  dollar 
was  worth  more,  intrinsically,  than  the  gold  dollar,  be^ 
ing  worth  in  1873  1^1.03  as  compared  with  gold. 

Up  to  that  time  the  coinage  of  silver  dollars  in  this 
country  had  been  very  limited.  One  would  think  from 
the  tenor  of  this  discussion  that  all  at  once  a  great  out- 
rage had  been  perpetrated  upon  silver,  that  it  had  been 
stricken  from  our  monetary  system  at  a  blow,  by  the 
force  of  law,  when  the  fact  is  that  from  1793  to  1805,  a 
period  of  twelve  years,  we  coined  but  1,489,617  silver 
dollars.  From  1806  to  1836,  a  period  of  thirty  years, 
we  did  not  coin  a  single  silver  dollar.  From  1886  to 
1873,  a  period  of  thirty-seven  years,  we  coined  only 
6,606,821  silver  dollars.  In  eighty  years  we  only 
coined  a  total  of  8,045,838  silver  dollars.  So  long  as 
silver  remained  more  valuable  than  gold  thei%  was  no 
clamor  for  the  free  coinage  of  silver,  but  in  1878,  when 
resumption  was  an  assured  fact,  and  the  people  had  do* 


294  SILYEB  AND  GOIA 

creed  that  they  would  keep  faith  with  their  creditors 
and  pay  their  unredeemed  promises,  theu  the  cham- 
pioiis  of  cheap  money  turned  their  attention  to  silver, 
finding  it  had  declined  in  value  from  91.03  in  1873  to 
iO.89  in  1878. 

Then  the  cry  went  up  for  the  free  and  unlimited 
coinage  of  silver  dollars,  of  871|  grains,  worth  89 
cents,  and  we  entered  upon  the  course  of  coining  silver 
and  continued  it  for  twelve  years,  and  during  that 
period  coined  419,000,000  silver  dollars,  while  in  the 
eighty  years  previous  we  had  coined  only  8,000,000. 
After  continuing  this  for  twelve  years  the  silver  in  the 
silver  dollar  declined  from  $0.89  to  $0.72,  and  we  found 
ourselves  with  419,000,000  silver  dollars  worth,  intrin- 
sically, but  72  cents  each.  In  1890  when  it  was  be- 
lieved that  our  volume  of  silver  then  in  circuhition  was 
as  great  as  could  be  maintained  at  a  parity  with  gold 
and  avoid  the  danger  of  a  silver  basis,  then  the  Demo- 
cratic party  again  clamored  for  the  free  and  unlimited 
coinage  of  silver.  The  battle  is  now  renewed  under 
the  plea  of  bimetallism,  and  the  advocates  of  the  free 
coinage  of  silver  seek  to  delude  the  people  by  asserting 
that  they  are  in  favor  of  bimetallism  while  its  oppo- 
nents are  not.     We  have  bimetallism  to-day. 

We  have  not  only  the  419,000,000  silver  dollars 
coined,  the  151,000,000  treasury  notes  given  for  silver 
bullion,  but  we  have  6,658  tons  of  silver  bullion  un- 
coined, and  let  it  be  remembered  that  the  repeal  of  the 
purchase  clause  of  the  Sherman  act  does  not  demone- 
tize a  single  dollar  of  this  nearly  600,000,000  of  silver. 
On  the  Contrary,  in  the  interests  of  bimetallism  we  pro* 
pose  to  maintain  the  whole  volume  of  this  silver  coin 
ftnd  paper  at  a  parity  with  gold.    We  who  favor  t^ 


HON.  JULIUS  C.  BURROWS.  295 

repeal  of  the  act  of  1890  are  tlie  only  real  bimetallists, 
and  we  are  pursuing  the  only  course  in  my  judgment 
by  which  bimetallism  can  be  maintained.  The  free 
'and  unlimited  coinage  of  silver  at  any  of  the  ratios 
named  will  destroy  bimetallism  and  will  reduce  this 
country  to  a  single  standard,  that  of  silver,  and  that 
depreciated,  and  I  am  suspicious  that  for  this  very 
reason  some  gentlemen  are  anxious  for  its  triumph. 
The  opening  of  the  mints  of  the  United  States  to  the 
unrestricted  minting  for  individuals  of  silver  into  legal 
dollars  at  any  ratio  to  gold  less  than  the  commercial 
value  of  both  metals,  under  the  pretense  of  aiding  the 
cause  of  bimetallism  or  for  the  purpose  of  establishing 
or  maintaining  bimetallism  in  the  United  States,  is 
simply  playing  upon  the  sentiment  and  credulity  of  the 
American  people. 

Bimetallism  means  the  joint  use  of  gold  and  silver 
as  money  and  the  history  of  our  country  prior  to  1873 
has  shown,  what  is  admitted  by  all  the  great  authori- 
ties on  bimetallism,  that  i^o  long  as  there  is  a  variation 
of  even  one-half  of  one  per  cent,  between  the  com- 
mercial value  of  the  pure  metal  contained  in  the  stand- 
ard  coins  and  their  face  value  the  one  which  has  the 
commercial  value  in  excess  of  the  other  will  not  circu- 
late side  by  side  with  that  other.  For  this  reason, 
prior  to  1834  gold  coins  did  not  circulate  in  this  couu' 
try,  and  after  the  change  of  ratio  in  1834  and  1837, 
silver  did  not  circulate.  Of  course  the  silver  dollar 
now  is  practically  credit  money,  sustained  at  par  with 
the  more  valuable  dollar  by  government  redemption  in 
gold;  but  with  the  free  and  unlimited  coinage  this 
would  necessarily  disappear.  There  would  be  no  gold 
redemption,  so  that  free  coinage  of  silver  at  this  time 


296  ATT.VKR   AND   GOLD. 

really  means  the  adoption  of  silver  monometallism. 
The  real  issue,  then,  is  not  between  bimetallism  and 
gold  monometallism,  but  between  bimetallism  and  sil- 
ver monometallism. 

Let  the  people  but  once  understand  that  all  this  talk 
about  bimetallism  is  simply  a  cover  to  hide  the  obnox- 
ious fact  that  it  is  silver  monometallism  that  is  the  real 
purpose,  or  at  least  the  certain  result,  and  they  will 
have  none  of  it.  There  is  no  considerable  portion  of 
our  people  who  would  vote  to  place  this  country  on  a 
silver  basis.  The  argument  between  the  advantages  of 
the  two  systems  is  a  real,  living  one.  Turn  your  eyes 
to  the  countries  having  the  silver  standard  alone— - 
Mexico,  South  America,  Asia — ^and  those  having  the 
gold  standard  with  a  silver  circulation  maintained  on  a 
parity  with  it,  like  England  and  all  Europe,  and  there 
is  no  room  for  argument.  The  latter  countries  are 
prosperous,  intelligent,  and  progressive;  the  former 
embarrassed,  poor,  and  ignorant. 

As  was  once  said  by  another,  "  I  think  I  see  clearly 
through  this  day's  business."  It  is  the  old  fight  for 
cheap  money,  and  the  people  are  deluded  with  the  idea 
that  if  money  is  cheap  they  will  be  prosperous.  A 
farmer  is  in  debt  $200 ;'  he  can  sell  his  hoi*se  for  $100 
in  the  money  of  to-day,  which,  applied  to  his  indebted- 
ness, would  discharge  one-half  of  it.  Now,  if  by  some 
process  he  can  cheapen  these  dollars  until  they  are 
worth  but  50  cents,  he  can  then  sell  his  horse  for  200 
of  these  50-cent  dollars  and  then  discharge  his  indebt- 
edness of  $200.  This  is  the  milk  in  the  cocoanut  of 
this  whole  business. 

But  let  me  say  that  cLeap  money  is  a  delusion,  and 
j|  depreciatipg,  fluciuatir^j^'  t^urrency  cheats  every  man 


noK.  JTTLIUS  C.  BURROWS.  297 

who  touches  it.  It  cheats  bolh  ways — when  it  is  de- 
clining and  when  it  is  appreciating.  In  war  times  the 
man  who  loaned  $1,000  in  gold  was  obliged  to  take  his 
pay  in  paper  worth  88  cents.  The  farmer  who  gave  a 
mortgage  for  $1,000  on  his  farm  wlien  we  were  on  a 
paper  basis  of  83-cent  dollars  felt  it  to  be  a  hardship 
when  he  was  obliged  to  pay  that  mortgage  in  paper 
dollars  worth  100  cents.  But  that  is  the  inevitable 
effect  of  an  unstable  currency.  I  aiBrm  that  whenever 
we  have  a  vacillating,  depreciated  currency  it  injures 
all  classes  and  all  conditions. 

But  labor  is  sought  to  be  deluded  with  the  idea  that 
it  is  in  their  Interest,  somehow,  to  have  cheaper  money. 
Labor  does  not  want  cheaper  money,  but  good  money 
— money  that  will  be  good  to-day  and  to-morrow,  for 
m^ney  is  not  only  the  measure  cf  value,  but  it  is  the 
storehouse  of  values;  and  when  a  laboring  man  has 
completed  his  day's  work  he  warlA  to  be  paid  in  a  coin 
that  will  be  not  only  the  full  '£i?asure  of  the  value  of 
that  day's  work,  but  in  a  dollar  that  will  preserve  the 
value  of  that  day's  work.  The  laboring  people  of  this 
country  having  to-day  $1,700,000,000  in  the  savings 
banks,  every  dollar  of  which  is  worth  its  face  in  gold, 
do  not  want  to  be  paid  in  a  cheap  currency  worth  one- 
half  that  amount ;  and  yet  the  appeal  is  made  here 
and  elsewhere  that  all  this  struggle  for  cheap  money  is 
in  the  interest  of  labor  I 

It  was  once  said  "Liberty,  how  many  crimes  are 
committed  in  thy  name  I "  and  it  might  be  as  truthfully 
said  to-day,  how  many  crimes  are  committed  in  the 
name  of  labor. 

At  one  time  a  practice  prevailed  in  England  of  clip- 
ping the  coins  and  theraby  depreciating  their  value. 


298  SILVER  AND  GOIiD. 

The  English  government  made  that  practice  a  felonj 
punishable  by  death.  Women  were  burned  al  the 
stake  and  men  were  dragged  to  the  scaffold  for  clipping 
the  coins  of  the  realm.  But  it  is  now  seriously  pro- 
posed to  legalize  an  unlimited  issue  of  debased  cur- 
rency. It  is  proposed  that  this  great  government, 
which  through  all  its  perilous  history  of  the  last  thirty 
years  kept  faith  with  all  its  creditors  and  stands  to-day 
with  a  credit  matchless  and  unimpaired,  shall  now 
enter  upon  the  shoreless  and  fathomless  sea  of  depre- 
ciated coinage,  whose  only  harbor  is  national  repudia- 
tion and  individual  bankruptcy,  to  the  utter  destruction 
of  the  nation's  credit  and  the  prospei*ity  of  the  citizen. 
Rather  than  do  this,  you  might  better  at  once  invoke 
the  policy  of  a  Solon,  and  scale  all  public  and  private 
debts,  and  have  done  with  it  at  once. 


r- 


HON.  VUJ  AH  A.  MOBSB.     ^  ^-v  %f  T  Tfiftfr  "        "  "^  — 


CHAPTER  XIII. 

BT  ELUAH  A.  MOBSB,  M.  0.,  12tH  DISTBICT  OF  MASS« 

AGHUSBTTS. 

The  question  is,  "  What  is  sound  money  ?  '•  In  brief 
any  form  of  money  which  is  interchangeable  with  gold, 
and  is  recognized  as  worth  its  value  in  gold  in  the  great 
commercial  nations  of  the  world,  England,  France, 
Germany,  Austria,  Russia  and  the  United  States.  The 
enemies  of  sound  money  and  those  who  favor  the  free 
coinage  of  silver,  while  professing  to  be  bimetallists  are 
really  monometallists,  in  favor  of  a  single  standard, 
and  that  standard  silver,  and  could  they  succeed  in 
getting  congi*ess  to  vote  for  the  free  coinage  of  silver 
in  the  ratio  of  16  to  1,  and  in  the  absence  of  any  inter- 
national agreement  as  to  the  ratio  they  would  immedi- 
ately degrade  our  financial  system  from  the  high  posi- 
tion which  it  now  occupies  to  the  level  of  that  of  Mex- 
ico, the  Central  American  and  South  American  repub- 
lics. '* From  which,  good  Lord,  deliver  us! "  At  pres- 
ent, under  the  financial  policy  inaugurated  by  the  Re* 
publican  party,  and  indorsed  and  continued  by  Presi^ 
dent  Cleveland,  all  forms  of  United  States  paper  money, 
and  silver  money  as  well,  are  interchangeable  with 
gold.  Perhaps  an  illustration  of  Mexican  finance  and 
the  effect  of  the  single  standard  may  be  in  place  here, 
A  gentleman  visiting  Mexico  paid  for  his  dinner,  foi 
which  the  charge  was  60  cents,  with  an  American  silvej 
dollar,  and  received  in  change  a  Mexican  silver  dollar, 
worth  50  cents  in  gold.     Our  consuls  in  China,  a  silves 


800  STXiVEB  AKD  GOLD* 

country,  are  able  to  double  their  salaries  by  excbangiiig 
$1  of  United  States  money  for  (2  in  silver  in  that 
country. 

The  precious  metals  always  have  been  and  always 
will  be  the  standards  of  value,  since  Abraham  bought 
the  cave  of  Macpela  to  bury  Sarah  in.  I  am  a  bimetal-* 
list,  I  believe  in  both  silver  and  gold  as  money,  but  I  in' 
»ist  that  they  must  be  maintained  at  a  parity  and  inters 
changeable  the  one  for  the  other.  What  this  country 
ought  to  do,  and  what  every  friend  of  sound  finance 
ought  to  endeavor  to  promote  is,  to  join  in  an  interna- 
tional agreement  as  to  the  ratio  between  gold  and  sil' 
ver.  And  there  are  at  present,  fortunately,  indications 
that  such  an  international  agreement  may  be  reached. 
When  that  becomes  an  accomplished  fact,  free  coinage 
of  silver  will  be  safe,  legitimate  and  proper,  and  the 
financial  question  will  be  eliminated  from  politics  as  it 
ought  to  be. 

I  regard  the  present  national  banking  system  of  the 
United  States  as  the  finest  banking  system  this  country 
or  the  world  has  ever  seen.  A  national  bank  bill  of 
the  United  States  is  not  only  interchangeable  for  gold 
in  any  section  of  our  own  country,  but  in  any  country 
of  Europe,  or  Asia  and  Africa  as  well.  I  regard  the 
national  banking  system  as  a  national  blessing,  and 
would  favor  its  indefinite  continuance,  having  United 
States  bonds  deposited  with  the  United  States  treasury 
for  a  basis,  supplemented  by  the  deposit  of  state  and 
municipal  bonds  as  security  for  circulation.  Nothing 
can  be  more  important  to  the  perpetuity  and  stability 
of  our  government  than  to  continue  the  present  sound 
financial  system. 


B.  BENJAMIN   ANDREWS.  801 


CHAPTER  XIV. 

THE  FALL  OF  PBIGES — ^THE  CAUSE  AND  THE  CUBE— BT 
PHESIDENT  E.  BENJAMIN  ANDBEWS  OF  BBOWN 
UNIVEBSITY. 

That  a  very  great  fall  in  general  prices  has  occurred 
^nce  1873  is  uncontested ;  but  the  baneful  effect  of 
that  fall  is  not  so  widely  seen.  Some,  indeed,  deny 
that  fall  in  prices  is  an  evil,  and  deem  it  an  advantage 
instead.  Such  people  confuse  falling  prices  with  fall- 
ing costs,  two  things  which  are  perfectly  distinct.  The 
amount  of  labor  necessary  to  produce  the  great  commod- 
ities of  life  may  be  lessening  from  year  to  year,  and 
yet  the  prices,  the  money  values  of  those  things,  be  in- 
creasing. Costs  and  prices  may  rise  or  fall  together,  or 
one  may  rise  as  the  other  falls.  The  costs  of  things 
were  falling  in  the  sixteenth  century,  when  American 
silver  was  first  getting  distributed  in  Europe :  but 
prices  were  then  rapidly  rising.  Likewise  between 
1850  and  1873  costs  were  falling  more  rapidly  than 
now;  but  prices  were  not  falling;  they  were  rising. 
Even  when  the  two  movements  coincide,  as  at  the  pres- 
ent time,  they  are  not  to  be  identified.  A  lowering  of 
the  costs  of  things  is  always  advantageous,  meaning  an 
easier  living  for  mankind.  A  fall  of  general  prices  is 
alwavs  a  curse. 

I  desire  also  to  emphasize  the  fact  that  it  is  the  fall 
in  prices  which  is  mischievous,  and  not  the  lowness  of 
the  prices  after  they  have  fallen.  While,  during  its 
progress,  a  general  fall  of  prices,  however  caused,  is  al* 


302  SILVER  AND  GOLD. 

ways  unfortunate,  and  while  the  effects  of  such  a  fal\ 
may  be  grievous  and  continue  long,  yet  a  low  range  o? 
prices  when  attained,  considered  apart  from  all  the 
causes  which  made  it  low,  may  be  as  desirable  as  a 
high  range  of  prices. 

In  what  I  shall  say,  therefore  I  have  in  mind  falling 
prices,  not  falling  costs,  and  falling  prices,  instead  of 
low  prices;  and  my  immediate  purpose  is  to  set  forth 
how  unfortunately,  in  many  ways,  a  fall  in  general 
prices  works. 

I  say,  first,  that  falling  prices,  such  as  are  now  occur- 
ring throughout  the  gold-using  world,  work  outrageous 
injustice. 

Appalling  is  tlie  moral  wrong  which  the  fall  qf  prices 
since  1878  has  wrought.  Think  of  all  those  time  con- 
tracts, which  form  so  prominent  a  feature  of  mod^n 
business.  Probably  70  per  cent,  of  the  world's  com- 
mercial transactions  are  based  on  some  sort  of  deferred 
payment  or  credit.  It  is  estimated  that  a  trillion  and 
a  half  dollars'  worth  of  these  deferred  payments  are 
outstanding  at  this  time.  Appreciating  money  is  oc- 
casioning injustice  in  case  of  every  one  of  these  obliga- 
lions.  The  business  friction  proceeding  from  this 
source  I  mention  presently ;  here  I  hold  up  to  view  the 
fraud  of  the  system ;  how  increase  in  the  value  of 
money  robs  debtors.  It  forces  every  one  of  them  to 
pay  more  than  he  covenanted  to  pay,  not  more  dollars 
but  more  value,  the  given  number  of  dollars  embody- 
ing greater  value  at  the  date  of  payment  than  at  date 
of  contract.  In  these  days  debtors  must  struggle  hard 
to  be  able  to  pay  what  they  honestly  owe.  A  money 
system  which  forces  them  to  pay  from  10  to  50  per  cent. 
blood  money  is  devilish  indeed. 


B.  BENJAHIK  AKDBSWS.  803 

On  September  1,  1865,  our  national  debt  was  about 
9^,750,000,000.  It  could  then  have  been  paid  off  with 
18,000,000  bales  of  cotton  or  25,000,000  tons  of  bar 
iron.  When  it  had  been  reduced  to  a  billion  and  a 
quarter  of  dollars,  80,000,000  bales  of  cotton  or  82,000,- 
000  tons  of  iron  would  have  been  required  to  pay  it« 
In  other  words,  while  a  nominal  shrinkage  of  about 
65  per  cent,  had  taken  place  in  the  debt,  it  had,  as  meas- 
iired  in  either  of  these  two  world  staples,  actually  been 
enlarged  by  some  50  per  cent.,  all  this  unearned  pur^ 
"phasing  power  going  to  the  holders  of  bonds. 

Between  1870  and  1884  the  public  debt  decreased  not 
far  from  three-quarters  of  a  billion  dollars,  yet  if  we 
take  wheat,  corn,  beef,  oats,  coal,  cotton,  and  bar  iron 
together  as  the  standard,  and  they  make  not  a  bad 
standard,  the  debt  did  not  decrease,  but  increased  not 
less  than  50  per  cent. 

In  the  Westminster  Review  for  October,  1880,  Mr. 
Burr  Robertson  computes  that,  the  British  national 
debt  at  <£775,000,000  was  in  1880  represented  by  a 
volume  of  staples  which  in  1878  or  1874  would  prob- 
ably have  cost  £890,000,000,  so  that  the  fall  in  prices 
between  1874  and  1880  affected  a  gratuitous  distribu- 
tion among  consol  holders  of  about  £115,000,000  at  the 
expense  of  the  tax-paying  public. 

He  says : 

"The  whole  amount  of  the  British  Governnrent's  ex- 
penditure in  the  financial  year  1878-79,  being  £85,- 
000,000,  represented  a  purchasing  power  of  at  least 
£12,000,000  more  than  the  same  amount  of  money 
would  have  done  1878-74,  when  the  the  total  expendi- 
ture was  £77,000,000,  so  that  between  1878-74  and 
1877-78  the  burden  of  taxation  in  the  United  Kingdom 


804  8ILVEB  AKD  GOLD. 

increased    by    a  purchasing    power  of    £20,700,000, 
though  the  nominal  increase  was  but  £8,000,000." 

Say,  if  you  please — what  in  now  and  then  a  case  may 
be  true,  though  it  is  not  true  generally — that  the  larger 
batch  of  commodities  now  needed  to  pay  a  given  debt 
cost  no  more  labor  than  the  smaller  batches  which 
would  have  sufiKced  to  pay  it  long  ago.  But  where  is 
the  justice  of  a  Inoney  arrangement  which  throws  all 
the  benefits  of  improved  facilities  in  industry  into 
creditor's  hands  and  utterly  forbids  debtors  to  share  in 
the  improvement  ? 

I  declare  next  that  a  fall  in  general  prices  places  a 
fatal  clog,  handicap,  or  brake  upon  the  creation  of 
wealth.  Making  all  due  allowance  for  subsidiary  dif- 
ficulties, the  radical  business  trouble  from  which  this 
and  other  countries  on  the  gold  standard  are  now  suf- 
fering is,  I  believe,  that,  owing  to  the  increasing  scarcity 
of  full  money,  goods  of  nearly  all  sorts  are  having  to  be 
sold  at  smaller  and  smaller  prices.  The  blight  upon 
our  business  originates  in  that  scarcity  of  full  or  ex- 
portable money,  leading  to  a  continuous  and  discourag- 
ing fall  in  general  prices,  which  first  made  production 
and  credit  business  less  and  less  profitable,  and  now  at 
last  makes  them  less  and  less  possible. 

Every  business  is  afiPected  more  or  less  with  certain 
Rxed  charges,  levying  upon  it  the  burden  of  an  absa< 
lute  number  of  dollars.  Taxes  and  mortgages  illus- 
trate this.  These  burdens  can  not  be  lightened  when 
assets  and  profits  fall.  You  continue  liable  to  pay 
them  dollar  for  dollar ;  that  is,  immensely  to  overpay 
them  so  far  as  value  is  concerned,  no  matter  how  much 
youi*  income  may  have  shrunk.    Your  assets  little  by 


B.   BENJAMIN   ANDREWS.  806 

tittle  drv^indle  away,  while  your  liabilities  remain  what 
they  were.  This  circumstance  infinitely  aggravates  the 
load  which  great  bonded  industries  like  railways  have 
to  carry,  and  vastly  aids  to  multiply  receivership. 

A  manufacturer  usually  considers  it  safe,  if  neces^ 
sary,  to  borrow,  say,  50  per  cent,  on  the  security  of  his 
plant.  The  decline  of  prices  which  began  in  1878 
caught  many  who  had  done  so.  In  a  multitude  of  cases 
the  decline  has  swept  away  the  owner's  portion  of  the 
capital,  leaving  only  enough  to  pay  the  loans.  Suppose 
a  ship  or  a  factory  built  at  a  cost  of  $100,000,  of  which 
$50,000  were  borrowed.  It  is  now  worth  not  over 
$60,000,  or  40  per  cent,  less  thalfi  cost.  The  mortgage, 
therefore,  represents  five-sixths  of  the  value  instead  of 
half,  the  owner's  interests  having  sunk  to  $10,000  in- 
stead of  $50,000.  As  trade  is  unprofitable,  many  a  man 
so  burdened  fails  to  pay  the  interest.  Then  the  mort- 
gage is  foreclosed,  the  property  is  forced  off  at  just 
sufficient  to  cover  the  loan,  and  he  is  ruined.  This 
process  exactly  describes  the  condition  of  innumerable 
business  men  in  this  and  other  countries  having  a  gold 
standard.  A  great  portion  of  the  country's  capital  has 
thus  silently  passed  into  the  hands  of  mortgagees  and 
and  bondholders.  The  discouragement  which  this  state 
of  things  produces  is  intense.  After  it  has  gone  on  for 
years  a  kind  of  hopelessness  oppresses  the  commercial 
community.  Nearly  all  advance  enterprises  come  to  a 
standstill,  many  wcrks  are  closed,  labor  is  paid  less 
or  thrown  out  of  employment  altogether,  strikes  are 
frequent,  and  the  utmost  distress  prevails.  It  is  out  of 
order  to  rejoin  that  the  vicissitude  described  merely 
transfers  wealth  from  one  possessor  to  another,  and  does 
.not  change  the  nation's  aggregate  welfare.    Were  thia 


806  8ILVEB  AND  GOLD. 

all  it  would  be  bad  enough.  The  craft  of  the  pick- 
pocket or  card  sharper  is  in  no  wise  innocuous  because 
it  only  transfers  wealth  from  one  pocket  to  another. 
The  prosperity  of  the  nation  depends  upon  the  security 
m  dn  may  feel  in  retaining  the  products  of  their  industry. 
Nothing  affects  it  more  vitally  than  unjust  alienation. 
But  the  process  set  forth  is  much  more  than  a  mere 
transfer  of  goods  from  owner  to  owner ;  it  prevents  pro- 
duction, and  that  on  a  truely  colossal  scale. 

Falling  prices  (appreciating  money)  set  up  a  special, 
positive  motive  for  abstaining  from  productive  industry. 
This  is  the  impulse  to  hoard.  Appreciation  of  money 
tempts  holders  of  money  and  of  titles  certain  to  be  paid 
in  money  to  cling  to  these  and  not  invest  in  industry. 
It  intensifies  the  demand  for  bonds  and  depresses  that 
for  stocks.  The  present  is  the  age  of  bondholder. 
That  all  are  so  anxious  to  invest  in  bonds  is,  from  an 
industrial  point  of  view,  an  alarming  symptom.  If  there 
is  anywhere  to  be  had  a  mortgage  on  wealth  already 
realized  or  practically  certain  to  be  realized,  everyone 
rushes  for  it,  while  new  undertakings  which  would  once 
have  been  thought  full  of  promise,  and  would  be  so  still 
but  for  the  money  difficulty,  responsible  capitalists 
avoid  unless  they  can  engage  in  them  under  some  special 
shelter  or  guaranty,  like  a  trust  or  a  very  high  tariff. 
Irresponsible,  feeble,  and  ignorant  industrialists,  to  be 
sure,  go  on  trying  to  produce  unsheltered.  Some  of 
them,  by  sweating  their  wage  workers,  have  some  suc- 
cess, their  winnings,  however,  speedily  falling  into 
bondholders'  pockets.  One  set  of  weak  producers  fails, 
another  rises  and  runs  the  same  course.  Always  some 
are  making  the  endeavor.  The  bondholder  never  fails 
of  supporters.    For  my  part  I  pity  the  class  of  bravoi 


JULIUS  C.    BURROWS, 


B.   BENJAMIN  ANDBBWS.  809 

small  industrialists  quite  as  much  as  I  do  the  men  who 
toil  for  wages.  They  are  a  sort  of  serfs.  A  business 
situation  whicli  thus  coddles  the  bondholder  and  snubs 
the  stockholder  can  not  be  healthy. 

In  this  risk  to  industry  from  having  to  produce 
agaiuist  a  falling  market,  this  bondholder  instinct,  ana 
this  hoarding  motive  or  impulse  to  clutch  at  gold-paying 
paper  and  not  let  go  save  when  return  in  kind  is  sure, 
we  see  the  reason  why  our  banks  overflow  with  funds 
which  they  can  not  loan,  and  our  streets  with  hungry 
men  willing  to  work,  but  unable  to  find  strong  em- 
ployees who  have  heart  for  productive  enterprises. 

TI)6  first  victims  to  falling  prices  are  producers  of 
the  weakest  class.  These  are  the  farmers — weakest  be- 
cause possessing  the  least  capital  and  unable  either  to 
combine  or  to  stop  producing.  Hence  the  agrarian  dis- 
tress in  every  farming  country  and  section  of  the  gold- 
using  world.  Hence  the  efforts  of  the  farmers  every- 
where to  better  their  condition  through  various  politi- 
cal devices. 

The  staple  of  Australia  is  wool,  whose  exportation,  so 
profitable  until  1873,  made  that  continent  very  prosper- 
ous. A  large  British  debt  was  contracted.  But  be- 
tween 1873  and  1888  wool  fell  from  88  to  16  cents. 
The  whole  clip  for  a  year  is  now  insufficient  to  pay  the 
annual  interest  on  Australia's  British-held  debt.  Panic 
rose  in  1888,  but  was  lulled  for  a  time  by  reborrowing 
at  high  rates.  But  it  came.  In  January,  1898,  40,000 
houses  were  to  rent  in  Melbourne,  the  population  hav- 
ing decreased  in  1892  by  over  17,000.  The  exodus  con« 
tinned  and  even  increased  in  1893. 

Now  it  is  our  turn.  The  United  States  pays,  mainly 
in  farm  produce,  at  least  $100,000,000  a  year  in  foreign 


310  SILVER   AND   GOLD. 

iDterest.  This  was  a  light  burdeu  in  1878,  when  wheal 
brought  $1.85  a  bushel  in  London  and  $1.15  on  the 
farm.  In  1889  it  had  fallen  to  $1.03  in  London  and  69 
cents  on  the  farm.  The  yield  for  1889  was  about  340,- 
000,000  bushels,  which  came  to  some  $115,000,000  less 
than  it  would  have  brought  sixteen  years  earlier,  to  say 
nothing  of  the  lower  income  in  freights,  which  had  to 
be  suffered  in  order  to  get  it  marketed  at  all.  For  the 
year  1893  our  wheat  brought  the  fanners  only  64  cents, 
the  lowest  price  ever  known  till  then.  In  1894  it  was 
lower  still.  The  New  York  price  of  wheat.  No.  2,  red, 
for  1894,  averaging  the  fifty- two  weekly  averages,  was 
60.4  cents.  The  price  on  the  farm  can  not  have  been 
far  from  40  cents.  The  London  price  was  22s.  lOd.  a 
quarter,  a  fall  of  8«.  6d.  from  1893.  In  1881,  883,000,- 
000  bushels  sold  for  $456,000,000.  In  1893,  896,000,- 
000  bushels  sold  for  but  $213,000,000,  a  shrinkage  of 
$243,000,000. 

The  money  yield  per  acre  of  wheat  has  fallen  in 
twenty  years  from  $13.16  to  $6,  or  about  54  per  cent. 
Cotton  prices  have  fallen  very  much  like  wheat  prices. 
The  cotton  crop  of  1893,  6,600,000  bales  of  about  470 
pounds  each,  brought  the  producer  not  over  6  cents  a 
pound,  or  about  '$186,000,000.  By  the  price  of  1873, 
viz,  16  cents,  it  would  have  brought  over  $310,000,000 
more,  viz,  $496,333,000.  The  money  yield  per  acre  of 
cotton  has  in  twenty  years  fallen  from  $28  to  $10.65,  or 
about  62  per  cent.  The  money  yield  per  acre  of  wheat, 
corn,  oats,  hay,  and  cotton,  taken  together,  has  fallen 
in  twenty  years  from  $15.65  to  $8.15,  or  about  48  per 
cent. 

.  From  1873  to  1889  the  nation's  paying  power  was  re- 
duced at  least  one-third.     We  could  no  longer  liq'iid^t^ 


B.  BEKJABCIN  AKDBEWS.  811 

our  foreign  interest  in  wheat  and  cotton,  and  had  to 
begin  sending  gold  abroad,  a  movement  intensified  in 
that  England  has  been  drawing  in  the  principal  of  her 
loans;  her  net  imports  of  gold  having  been  for  1887 
^600,000;  for  1888,  £800,000;  for  1889,  X8,000,000; 
for  1890,  £9,000,000. 

The  agricultural  classes,  sections,  and  nations  im- 
poverished, lose  power  to  purchase  of  the  manufactur- 
ing classes,  sections,  or  nations,  and  so  these,  with  the 
middle  men,  carriers,  and  merchants,  also  grow  poor. 
Adversity  comes  over  the  entire  world  of  producers. 
The  only  people  able  to  prosper  are  the  very  small 
class  who  create  nothing  but  live  upon  income  from 
loans.  Even  these,  though  they  may  profit  fot  a  time, 
can  not  escape  loss  if  money  continues  to  grow  pre- 
cious. Failures  and  repudiation  must  ensue.  Portugal, 
Spain,  Greece,  and  Argentina  have  already  defaulted 
on  their  bonds.  Mexico  has  virtually  threatened  to  do 
the  same.  It  is  believed  that  Italy  was  kept  from 
repudiation  only  by  the  use  of  British  gold  to  bribe 
legislators  to  vote  new  taxes.  The  richest  money 
lenders  on  earth,  the  Rothschilds,  appear  to  have  con- 
cluded that  their  surest  way  to  realize  satisfactorily 
upon  their  loans  is  to  check  the  rise  of  gold  by  increas- 
ing the  world's  stock  of  silver  money.  At  the  Brus- 
sels Conference  Alfred  Rothschild  earnestly  argued  for 
such  a  policy. 

I  maintain,  thirdly,  that  falling  prices  in  any  country, 
at  the  very  same  time  that  they  lessen  such  country's 
ability  to  compete  with  others,  invite  against  it  disas- 
trous competition  from  lands  differently  situated.  In 
Europe  agriculture  is  at  the  lowest  ebb  ever  seen  by 
living  men.    All  silver  countries  can  send  their  pro- 


812  8ILTEB  AMD  GOIiD. 

dace  there.  As  silver  has  not  with  them  lost  in  pop- 
chasing  power,  and  as  they  receive  the  same  amount 
of  it  for  one  sovereign,  mark,  or  franc,  as  once  thejr 
did  for  two,  they  can  prosper  themselves  while  starving 
European  farmers.  Europe's  other  productive  indus- 
tries suffer  from  the  same  cause.  European  merchants 
trading  with  silver  countries,  find  on  the  one  hand  their 
capital  invested  there  reduced  by  one-half,  and  on  the 
other  that,  the  par  of  exchange  being  destroyed,  their 
present  trade  with  those  countries  is,  if  not  destroyed, 
a  mere  matter  of  gambling  chance. 

Sir  Thomas  Sutherland,  presiding  at  the  last  annual 
meeting  of  the  Peninsular  and  Oriental  Company,  after 
calling  *  attention  to  the  extraordinary  advantages 
which  silver  countries  now  possess  in  manufacturing — 
noticing  Bombay  as  a  rival  to  Manchester,  Japan,  with 
its  splendid  supply  of  coal,  as  making  enormous  strides 
in  cotton  and  other  maufactures,  and  Shanghai  as  hav* 
ing  entered  upon  similar  enterprises  on  a  large  scale, 
said : 

^^  There  can  not  be  the  slightest  doubt  that  this  low 
value  of  silver,  if  it  continues,  must  tend  to  check  ex- 

f)ort3  from  Europe  to  those  countries,  and  must  stiniu- 
ate  industrial  and  manufacturing  activity  in  the  far 
East.  It  is  impossible  to  foresee  to  what  this  may 
eventually  tend ;  but  there  may  possibly  be  in  this 
room  at  the  present  moment  some  gentleman  young 
enough  to  live  to  see  the  Peninsular  and  Oriental  ships 
built  on  the  banks  of  the  Yang-tse-Kiang  instead  of 
the  banks  of  the  Clyde,  or  the  Tees,  or  the  Tyne." 

The  first  spinning  mill  in  Japan  was  built  in  186S, 
with  5,456  spindles. 

At  the  end  of  1883  there  were  16  mills  with  48,700 
spindles ;  1888,  24  mills  with  88,140  spindles ;  1892» 


E.   BENJAMIN   ANDREWS.  81) 

89  mills  with  408,314  spindles ;  1893,  46  mills  witli 
about  600,000  spiudles.  . 

From  5,000  spindles  to  600,000  in  thirty  years  ia 
rapid  progress. 

The  bimetallist  members  of  the  late  German  silver 
commission  placed  on  the  record  of  the  twenty-first 
session  the  following  solemn  declarations : 

*^  A  setback  to  German  agriculture  is  manifest,  refer, 
able,  on  the  one  hand,  to  the  necessity  of  selling  a  con- 
stantly increasing  amount  of  depreciated  agricultural; 
products  in  order  to  pay  wages,  interest,  rent,  leasesr 
taxes ;  and  on  the  other  hand,  to  the  increased  powei 
of  competition  on  the  part  of  other  countries,  -silver 
countries,  that  is,  and  countries  on  a  money  basis  of 
depreciated  paper.  In  proportion  as  their  silver  or 
paper  loses  in  power  to  buy  gold,  these  countries,  en- 
joying in  effect  a  high  export  premium,  are  able  to 
throw  their  native  products  upon-  the  world's  markets 
at  prices  far  beneath  what  it  costs  German  farmers  to 
produce  them,  so  plunging  these  latter  in  deep  distress. 

*'  The  demonetization  of  silver  is  also  working  a  mora 
and  more  visible  injury  to  German  manufacturing  in^ 
dustry  : 

*'  (a)  On  account  of  the  ever-lessening  ability  of  the 
farmer  class  to  purchase  manufactured  products. 

"  (6)  On  account  of  the  decrease  in  exports  to  silver 
lands  and  of  the  consequent  recoil  upon  the  home 
market  of  the  articles  hitherto  exported  thither. 
.  '*  (<?)  On  account  of  the  competition  offered  by  the 
rapidly  developed  manufacturing  plants  of  silver  lands, 
favored  by  the  low  cost  of  production  there  and  by  the 
premium  upon  exportation  therefrom  produced  by  the 
fall  in  the  gold  price  of  silver. 

^'  Unless  means  are  taken  to  prevent,  it  will  not  be  long 
before  the  manufactured  products  of  the  silver  coun- 
tries will  find  the  German  market.  To  import  Indian 
yarn  into  Germany  is  already  a  paying  operation*'* 


914  SILVER  AKD  GOIJ>. 

I  could  recite  innumerable  testimonies  of  the  same 
tenor  with  these  did  time  permit  and  occasion  demand. 
It  is  facts  like  these  which  have  led  the  Reichstag  to 
vc  e  for  an  international  monetary  conference. 

^tjpidly  as  the  ignorant  may  overlook  it,  and  per- 
sistently as  those  interested  in  maintaining  the  sole 
gc  I  standard  may  deny  it,  the  United  States  is  a 
victim  of  this  same  silver  land  competition.  That  it  is 
which  so  lowers  the  price  of  wheat  and  cotton,  or  nar- 
rows the  market  for  them.  The  acreage  under  these 
staples,  to  be  sure,  keeps  up  fairly  well,  though  the 
price  falls.  Certain  writers  therefore  allege  that 
cheaper  production  accounts  for  the  fall.  If  farmers 
could  not  afford  to  sell  at  these  low  prices,  it  is  argued, 
they  would  stop  raising.  That  is,  I  believe,  a  total 
misconception.  The  farmers  continue  these  crops,  not 
because  they  can,  in  the  sense  that  the  crops  pay,  but 
because,  being  tied  to  their  farms,  usually  mortgaged, 
they  must  continue,  however  petty  their  income,  and 
try  to  make  up  by  the  q\2antity  raised  the  lost  suffered 
in  fall  of  price. 

The  dependence  of  prices  in  America  upon  the  gold 
price  of  silver,  in  the  case  of  articles  whose  surplus  com- 
petes in  London  with  the  produce  of  silver  countries, 
is  very  direct.  One  might  suppose  that  the  larger  market 
would  rule,  and  that  the  London  (gold)  price  would 
remain  steady  instead  of  being  itself  fixed  by  the  silver 
price.  But  it  is  not  so,  and  this  for  a  reason  which 
Mr.  6.  Jamieson,  British  consul-general  at  Shanghai, 
gives  in  an  article  in  the  Journal  of  the  Royal  Statisti- 
cal Society,  London,  for  December,  1893.     He  says : 

*'It  is  a  well-known  fact  in  the  commercial  world 
that  it  is  much  easier  to  lower  prices  than  to  raise  them« 


B.  BEKJAMtK  AKDBBWS.  816 

If  you  can  afford  to  go  down  a  half-penny,  a  bargain  is 
much  more  easily  struck  than  if  you  are  bound  to  stand 
out  for  a  rise  of  a  half-penny.  It  would  seem,  then,  to 
be  a  general  rule  that  the  adjustments  following  on  a 
fall  of  exchange  are  always  made  along  the  line  of  least 
resistance,  and  that,  therefore,  it  is  not  the  China  (or 
India)  price  that  rises,  but  the  London  prices  that  fall. 
Merchants  find  it  easier  to  buy  Asiatic  produce  at  the 
old  prices  and  sell  it  in  London  at  a  concession  than  to 
stand  out  for  old  prices  at  home  in  order  to  pay  more 
to  the  producer. 

"From  this  point  of  view  it  is  really  silver  that  rules 
the  world.  It  is  the  purchasing  power  of  the  cheaper 
metal  that  determines  the  prices  all  over.  Just  as  in  a 
bimetallic  country  the  cheaper  metal  will  drive  out  the 
dearer  toward  her  monometallic  neighbor,  so,  as  between 
countries  of  different  standards,  will  the  prices  prevail- 
ing in  the  countries  of  the  cheaper  metal  drag  down 
prices  all  over  to  their  own  level.  And,  reasoning  for- 
ward from  the  experiences  of  the  past,  it  would  not, 
perhaps,  be  too  rash  to  suppose  that  the  prices  of  com- 
uiodities  in  Europe,  so  far  as  they  can  be  drawn  in  any 
fair  quantities  from  silver-using  countries,  must  continue 
to  decline  with  every  further  fall  in  (the  gold  price  of) 
silver." 

It  is  not  silver  countries  alone  whose  exports  crowd 
those  of  gold  lands.  Worse  pressure,  if  possible,  pro- 
ceeds from  countries  like  Greece,  Spain,  Portugal,  and 
Argentina,  whose  crushing  gold  debts  have  driven  them 
to  a  paper-money  basis.  The  depreciation  of  tlieir 
paper  acts  as  a  premium  on  exportation  from  these 
countries  to  gold-standard  countries,  depressing  in 
these  latter,  first  the  prices  of  international  commodi- 
ties, and  indirectly  the  prices  of  many  other  commodi- 
ties. 

Jf  in  Spain,  say,  gold  rises  from  paper  par  to  125 


816  BtLVER  AND  GOLD. 

above,  a  Parisian  wine  merchant  can  buy  with  a  given 
number  of  napoleons  25  per  cent,  more  Spanish  ex- 
change than  before.  As  it  will  take  a  long  time  for 
Spanish  paper  money  to  lose  any  of  its  purchasing 
power  in  the  rural  districts,  and  as,  therefore,  each 
paper  peseta  will  practically  buy  as  much  wine  after  the 
rise  of  gold  as  it  would  before,  the  Frenchman's  gold 
laid  out  in  Spain  brings  him  a  quarter  more  wine  than 
before.  Therefore  any  ^rt  of  the  demand  on  him  that 
he  can  supply  with  Spanish  wine  he  is  sure  to  cover  in 
this  way  instead  of  purchasing  in  France  itself.  The 
French  raisers  of  brands  previously  competing  with 
Spanish  are  driven  from  the  market,  while  all  French 
wine  producers  suffer  more  or  less.  The  same  is  true 
in  case  of  several  other  commodities.  Paper-money 
countries  having  this  advantage  are  doubtless  laying 
up  wrath  against  the  day  of  wrath  unless,  indeed,  as 
many  of  them  will  certainly  do  if  the  craze  for  gold 
continues,  they  give  up  all  idea  of  returning  to  specie; 
but  in  the  meantime  they  immensely  gain  at  the  ex- 
pense of  neighboring  States  whose  money  is  at  gold  par. 
Precisely  this  is  the  explanation  of  the  Argentine  wheat 
shipments,  which  have  of  late  become  so  enormous  as 
to  alarm  United  States  and  Russian  farmers.  In  1892 
Argentina  exported  only  about  25,000,000  bushels. 
In  1898  the  shipments  rose  to  45,000,000  bushels ;  in 
1894,  it  is  said,  to  75,000,000.  The  export  for  this 
year  will  probably  show  an  even  greater  advance. 

Who  are  our  chief  competitors  for  the  tin  industry  ? 
Not  Cornwall  or  Australia,  but  the  Straits  and  Bolivia 
— both  silver  countries.  Bolivia  sent  to  Liverpool  224 
tons  of  tin  in  1895;  in  1894,  8,482  tons.  In  1878  the 
Straits    Settlement    shipped   6,968    tons;  in  1894  it 


B.  BENJAMIN  ANDREWS.         ' s  "    C  J817 


shipped  46,640  tons.  Australia,  a  gold  country,  ex- 
ported 11,121  tons  in  1898;  in  1894  only  5,824  tons. 
Cornwall  used  to  produce  annually  10,000  tons ;  last 
year  its  product  was  but  8,000.  Moreover,  while  the 
tin  industry  of  the  Stmits  is  most  flourishing,  that  of 
Cornwall  is  the  despair  of  everybody  connected  with 
it. 

Manufacturing  in  general  is  interested  in  this  ques- 
tion. All  parties  agree  with  Governor  McKinley's  re- 
mark at  Rochester  on  Lincoln's  birthday,  that  ^^  We 
want  a  foreign  market  for  our  surplus  products  of 
manufacture  and  agriculture."  Some  would  promote 
foreign  trade  by  reciprocity  and  by  subsidies  upon 
steamship  lines  to  foreign  countries.  Others  prefer  the 
method  of  reducing  duties.  But  no  intelligent  Amer- 
ican will  deny  that  in  some  way  or  other  exports  from 
the  United  States  of  America  must  be  increased  if  the 
prosperity  of  our  country  is  to  go  on.  A  very  great 
part  of  the  new  exports  must  go  to  lands  on  the  silver 
basis,  as  China,  Japan,  Mexico,  Central  and  South 
America.  We  ought  to  be  the  principal  manufacturers 
for  all  those  regions.  No  other  great  manufacturing 
nation  is  so  near  them. 

But  to  utilize  this  gigantic  possibility  we  must  be 
quick,  or  those  parts  of  the  world  will  have  supplied 
themselves.  At  many  a  point  in  India  and  China,  at 
well  as  in  Mexico  and  further  south,  the  tall  chimneys 
already  smoke  and  the  clatter  of  machinery  is  heard. 
Soon,  unless  the  currency  problem  is  settled,  the  teem- 
ing millions  there  will  cease  to  buy  of  the  English  or  of 
ourselves. 

It  is  in  this  fact  that  the  patriotic  advocates  of  do- 
mestic free  silver  find  their  inspiration.    Aware  of  the 


818  SILVER  AND  GOLD. 

absolute  necessity  resting  upon  this  country  to  extend 
its  foreign  markets,  they  would  take  advantage  of 
England's  folly  in  continuing  the  regime  of  falling 
prices.  They  would  place  the  United  States  at  the 
head  of  the  silver-using  nations  to  do  their  manufac* 
turing.  ^'  Let  us  break  off  commercial  relations  with 
Europe,"  they  say,  "  if  only  we  can  establish  such  re- 
lations with  that  vast  world  where  manufacturing  is 
either  nonexistent  or  inchoate,  and  must  grow,  if  at  all, 
witli  difficulty  ;  and  let  us  create  for  those  populations 
all  their  manufactured  articles,  taking  in  return  those 
things  which  they  can  produce  so  much  more  easily 
than  we." 

Much  as  this  proposal  has  been  ridiculed  it  has  great 
force.  The  thought  in  itself  is  magnificent.  We  no 
doubt  have  an  opportunity  by  the  means  suggested  to 
"  dish  "  England  in  the  markets  of  the  world.  If  this 
could  be  accomplished  without  involving  other  difficul- 
ties it  would  be  the  finest  commercial  coup  d'etat  evec 
effected.  So  much  reason  attends  the  notion  that  it 
seems  to  me  sheer  madness  to  oppose  to  it  a  policy  like 
England's  present  one,  of  stubbornly  adhering  to  money 
based  on  ?old  alone. 

Fourthly,  we  see  in  the  fall  of  prices  and  the  accom- 
panying danger  to  business  the  true  cause  of  the  world- 
wide movement,  so  astounding  to  free  traders,  for  trusts 
and  what  we  should  once  have  called  inordinate  tariffs. 
This  phenomenon  marks  the  precise  period,  since  1873, 
during  which  money  has  been  swelling  in  value  and 
goods  losing  in  value.  New  South  Wales,  till  1891 
ever  the  free  trader's  welcome  standby,  succumbs  to 
this  drift.  The  reason  of  it  is  perfectly  obvious.  Owing 
to  the  down-grade  prices,  production  is  extra  hazardous 


E.  BBNJAMIN  ANDBBWS.  819 

and  needs  shelter.  When  prices  threaten  or  begin  to 
fall,  when  stock  depreciates  upon  manufacturers'  hands, 
they  inevitably  struggle  to  avert  these  results,  welcom- 
ing any  resource  that  can  aid.  Unable  to  compass 
their  ends  otherwise  they  agitate  for  high  tariffs.  I 
unhesitatingly  avow  the  conviction  that  had  prices  since 
the  war  been  stationary  or  only  slowly  advancing,  the 
rise  in  United  States  tariff  rates  culminating  in  the  Mc- 
Kmley  law  would  never  have  been  so  much  as  thought 
of. 

These  rates  have  been  lowered  somewhat,  and  if  tlie 
change  had  been  preceded  by  proper  monetary  reform 
the  reduction  might  be  permanent,  and,  perhaps,  in  a 
little  time,  with  the  approval  of  all,  made  greater  still. 
But  I  fear  that  it  can  not  be  permanent.  I  would  say 
to  my  Democratic  friends,  begging  them  note  well  the 
prophesy,  that,  unless  monetary  reform  comes  soon,  the 
tariff  which  they  have  been  at  such  great  pains  to  give 
us  will  speedily  be  ripped  in  pieces  and  rates  of  duty 
be  imposed  higher  than  those  of  the  McKinley  act.  I 
believe  this  inevitable.  Mark  my  words  :  Alow  tariff 
policy  can  never  he  established  in  these  United  States  so 
long  as  gold  alone  continties  the  basis  of  our  currency. 

By  DO  means  all  those  crying  for  highest  protection, 
whether  here  or  in  Europe,  are  addicted  to  protectioix 
as  a  general  policy.  Many  such  are,  in  theory,  free 
traders,  i.  e.,  they  would  advocate  free  trade  were  prices 
stable  or  rising.  Willingness  to  subject  your  country's 
industries  to  normal  foreign  competition  is  one  thing ; 
quite  another  is  it  to  do  so  when  your  competitors  are 
helped  to  beat  you  by  a  home  bonus  on  exportation,  as 
is  the  case  with  all  exporters  from  silver  and  paper 
lands  today.    In  France  these  ^* opportunist "  proteo* 


820  SILVER  AND  GOLD. 

tionists  are  a  powerful  and  growing  party.  Their  logiw 
is  as  yet  imperfectly  understood  in  this  country ;  but 
men  are  mastering  it  more  and  more,  and  it  will  insure 
to  the  protectionist  ranks  armies  of  recruits  in  every 
congress  and  presidential  election  till  general  prices 
cease  falling. 

Such  is  my  diagnosis  of  our  present  industrial  disease. 
In  my  belief  a  true  cause  of  morbid  conditions  in  the 
body  industrial  has  been  laid  bare.  Tlie  extrusion  of 
silver  from  service  as  full  money  greatly  reduced  the 
amount  of  the  world's  money  available  for  ultimate 
liquidation — reduced  it  absolutely  and  reduced  it  far 
more  relatively  to  those  needs  for  fundamental  money 
which  rise  from  the  growth  of  population  and  business. 
A  distressing  appreciation  of  money  per  unit  has  en- 
sued, meaning  a  tremendous  drop  in  prices.  This  dis- 
astrously handicaps  all  production.  It  does  not  en- 
tirely prevent  production.  Nothing  short  of  killing  off 
the  race  could  do  that.  But  it  renders  production  in- 
definitely feeble  compared  with  what  it  would  be  but 
for  the  handicap.  The  world  needs  an  addition  to  its 
fundamental  money ;  not  more  bank  notes,  not  more 
token  coinage ;  not  more  full  legal  tender  tokens  like 
our  silver  dollars  and  the  French  ecus,  but  money  that 
can  do  everything  that  any  money  can  do.  We  need,  I 
say,  a  greater  bulk  of  money  that  is  exportable,  good 
in  ultimate  settlements,  suitable  for  bank  and  govern- 
ment reserves.  A  stop  must  be  put  to  this  ubiquitous 
rush  and  clutch  for  gold;  the  passion  for  hoarding 
must  be  cured.  It  can  only  be  done  by  abolishing  the 
legal  primacy  of  gold.  This  is  the  proper  prescription 
for  our  patient.  The  only  question  is  whether  he  can 
be  induced  to  try  the  remedy.    My  belief  is  that  the 


E.  BENJAMIN  ANDREWS.  821 

rehabilitation  of  silver  as  full  moaey  by  a  few  of  the 
great  commercial  States  of  the  world  would  furnish  it. 
If  SO9  that  course  is  most  desirable. 

In  saying  this  I  am  not  forgetting  the  gratifying  new 
output  of  gold  of  late  in  South  Africa,  Australia,  and 
the  United  States.  This  does  not  lessen  in  the  slight- 
est our  need  to  make  silver  again  full  money. 

It  is  interesting  to  notice  the  joy  with  which  the  new 
gold  is  hailed  by  men  who  have  been  assuring  us  for 
years  that  no  more  money  is  needed ;  that  the  quantity 
theory  of  money  is  exploded ;  that  prices  are  not  fixed 
by  money  but  by  credit,  and  that  every  fall  in  prices 
ought  to  be  hailed  with  hallelujahs.  Their  welcome  to 
this  increase  of  the  world*s  monetary  stock  justifies 
their  good  sense  at  the  expense  of  their  consistency. 
The  veteran  French  economist  M.  Leroy-Beaulieu  is 
one  convert.  So  recently  as  1889  he  held,  as  many 
Americans  hold,  that  the  fall  of  prices,  which  he  de- 
clared a  blessing,  proceeded  not  from  a  diminution  in 
the  supply  of  money,  but  solely  from  progress  in  the 
industrial  arts,  cheaper  tl'ansportation,  and  overproduc- 
tion. He  has  now  changed  his  view.  He  believes  that 
the  new  gold  will  cause  each  grain  of  gold  in  the  world 
to  lose  its  value,  to  wit,  will  provoke  a  rise  in  general 
prices  ;  and  that  '^  all  the  countries  on  a  basis  of  depre- 
ciated money  and  suffering  from  low  exchanges  will  be 
able  to  better  their  monetary  situation  and  come  back 
to  a  solid  monetary  standard." 

So  Mr.  Henry  Binns,  in  the  London  Economist  for 
last  December  29,  anticipates  a  '*  considerable  lise  "  in 
prices  from  the  increasing  supplies  of  gold,  and  views 
the  rise  as  a  ground  not  of  '^  alarm,  but  of  congratula- 
tion."    Our  American  monetary  theorists  of  the  gold 


822  BILyEB  AND  GOLD. 

school  must  admonish  M.  Leroy-Beaulieu.  From  their 
point  of  view  his  allegations  are  fatally  heretical.  To 
me,  however,  they  are  most  welcome,  only  I  can  not 
agree  with  M.  Leroy-Beaulieu  in  tlie  expectation  that 
gold  alone  will  stay  the  fall  of  prices  or  heal  the  dis- 
ordered exchanges  now  prevailing  between  gold  coun- 
tries and  silver  or  paper  countries.  Thus,  though  1893 
brought  forth  $4,250,000  more  gold  tHan  1892,  prices 
during  1894  did  not  rise,  but  fell  10  per  cent.  The 
prophecies  of  a  future  annual  output  of  gold  very  much 
exceeding  that  of  1893— $165,522,000— rest  on  no  solid 
foundation.  They  are  made  largely  in  the  interest  of 
speculation.  Eight  South  African  mines  of  which  I 
have  read,  possessing  a  capital  of  only  $75,500,000, 
though  they  have  as  yet  paid  no  dividend  at  all,  are 
floating  stock  which,  at  the  rates  at  which  it  is  quot  ad, 
foots  up  $215,430,000. 

In  his  last  report  the  Director  of  our  Mint  presents 
some  very  interesting  figures  touching  the  gold  out- 
look ;  but  I  do  not  think  all  his  deductions  from  them 
quite  sound.  He  concludes  that  the  value  of  the  gold 
alone  which  in  1873  was  available  for  coinage  purposes 
in  the  western  nations  exceeded  by  $7,000,000  the  total 
value  of  gold  and  silver  both  available  for  coinage,  on 
the  average,  in  the  years  1866-1873.  Were  this  true, 
the  fact  would  but  serve  to  illustrate  how  insignificant 
so  slight  an  increase  is  in  view  of  the  advance  that  has 
meantime  occurred  in  population  and  business ;  be- 
cause, as  just  stated,  prices  fell  in  1884  instead  of  ris- 
ing. 

But  I  believe  Mr.  Preston  mistaken  in  his  conclusion 
and  in  a  number  of  data  which  help  him  to  it. 

(1)  While  from  the  world's  gold  yield  for  1898  he 


E.  BENJAMIN  ANDREWS.  828 

properly  deducts  Russians  product  of  879825  kilograms 
as  DOW  serving  no  monetary  end,  he  does  not  deduct 
India's  product  of  6,788  kilograms  ($8,813,600). 

(2)i  While  in  estimating  the  industrial  use  of  gold 
and  silver  in  1871-1878,  which  he  naturally  wishes  to 
make  as  large  as  possible,  that  the  monetary  gold  and 
silver  of  those  years  may  seem  the  smaller,  he  unhesi- 
tatingly uses  Soetbeer's  estimate ;  on  the  other  hand, 
in  estimating  the  corresponding  figure  for  gold  in  1898 
he  first  scales  Soetbeer's  outside  estimate  by  10,000 
kilograms,  then  averaging  this  result  with  three  less 
trustworthy  estimates,  one  of  which,  Ottomar  Haupt's, 
I  consider  of  little  value.  Haupt's  data,  the  poorest  of 
all,  Mr.  Preston,  iu  case  of  three  important  countries, 
duplicates  in  the  United  States  estimate,  thus  weighing 
them  twice  in  the  result  arrived  at,  and  doubling  the 
power  of  whatever  error  they  may  contain.  Suess's 
estimate,  which  agrees  with  Soetbeer's  outside  figure  of 
120,000  kilograms,  is  ignored  altogether.  Thus,  in- 
stead of  Soetbeer's  outside  estimate  of  120,000  kilo^ 
grams  of  gold  as  used  industrially,  etc.,  in  each  recent 
year,  he  places  the  figure  at  91,125  kilograms. 

(8)  Except  as  to  three  countries,  Mr.  Preston  makes 
no  allowance  for  any  increase  in  the  industrial  con 
sumption  of  gold  in  1898  over  that  of  preceding  years. 
But  it  is  probable  that  this  was  very  considerable, 
since  consumers  of  gold  were  mainly  people  wh^  little 
felt  the  hard  times,  which  indeed  began  only  when  the 
year  was  half  over,  and  since  the  appreciation  of  gold^ 
by  making  the  possession  of  gold  ware  a  badge  of 
wealth,  probably  increases  rather  than  decreases  vlie 
per  capita  number  of  grains  of  it  yearly  purchased  fas 
8uch  purposes. 


824  SILVER  AND  GOLD. 

My  belief  is  that  the  gold  used  up  yearly  for  art,  iu« 
dustry,  aud  boarding  considerably  exceeds  Dr.  Soet- 
beer's  extreme  estimate  of  120,000  kilograms.  I  so 
judge  because  of  •«  general  habit — overlooked,  I  think, 
even  by  Soetbeer,  far  the  most  careful  statistician  who 
has  examined  the  subject — which  small  jewelers  have 
of  using  up  gold  coins  coming  to  them  in  trade  or 
bought  at  banks.  Such  coins  must  aggregate  a  vast 
sum,  of  which  the  big  jewelers,  whom  alone  statisti- 
cians consult,  would  be  quite  ignorant.  Soetbeer,  the 
ablest  authority  on  the  subject,  among  the  last  words 
he  ever  wrote  said,  in  1891  or  1892 : 

'^  Although  it  can  not -be  demonstrated  that  the  use  of 
gold  in  arts,  hoards,  and  export  to  the  East  consumes 
the  entire  output  from  the  mines  each  year,  yet,  on  the 
other  hand  it  can  not  be  demonstrated  that  it  does  not 
do  so.'* 

Allowing  for  the'  jeweler's  habit,  which  I  have  re- 
ferred to,  and  for  some  increase  of  consumption  in  1893 
beyond  tliat  of  preceding  years,  I  should  place  the 
gold  going  to  arts,  industry,  and  hoards  in  1893  at  least 
so  high  as  125,000  kilograms.  'Not  insisting  on  this, 
however,  let  us  simply  take  Soetbeer's  figures  for  1891, 
viz,  120,000  kilograms,  equaling  179,752,000.  Adding 
to  this  the  Russian  and  Indian  product  for  1893,  we 
have,  as  the  sum  of  gold  put  in  that  year  to  nonuMne- 
tary  service,  and  therefore  to  be  deducted  from  the 
total  product  of  the  world,  11(108,565,600,  instead  of 
$88,000,000,  the  amount  deducted  by  Mr.  Preston. 
The  monetary  part  of  the  1898  gold  product  of  $155,- 
522,000  was  therefore  only  $46,956,400,  and  not  $67,- 
522,000,  as  concluded  by  the  Director  of  the  Mint.   The 


FEED  T.    DUBOIS, 


B.  BENJAMIN  ANDREWS.  827 

Increment  to  the  western  world's  money  stock  for  1898, 
instead  of  being  $7,000,000  more  than  that  of  one  of  the 
years  just  preceding  the  demonetization  of  silver,  was 
less  by  $13,605,575  than  the  average  of  those  years. 
When  we  consider  with  this  the  world's  increase  in 
population  and  wealth  since  1878,  England,  a  repre- 
sentative country,  having  gained  7,000,000  souls  and 
increased  her  commerce,  spite  of  the  fall  in  prices,  from 
470,000,000  sterling  to  681,000,000,  it  is  not  strange 
that  prices  fell  10  per  cent  in  1894^ 

I  am  happy  to  join  the  Director  of  the  Mint  in  his 
belief  that  the  yearly  output  of  gold  is  likely  to  in- 
crease for  a  number  of  years ;  and  though  nonmone- 
tary consumption  will  increase,  too,  I  presume  that  the 
part  going  to  replenish  the  monetary  supply  will  be  not 
a  little  augmented.  But  there  are  three  colossal  and 
obdurate  reasons  why  one  can  not  expect  our  business 
distress  to  be  relieved  by  gold  alone. 

Suppose  the  new  gold  to  succeed  in  stoppi  ng  for  a  single 
year  the  fall  in  prices.  No  one  can  imagine  tlie  immense 
spur  and  enlargement  to  iudustry  which  w  Jtild  immedi- 
ately ensue.  Let  prices  cease  to  fall,  let  investments  in 
enterprises  for  producing  wealth  again  become  safe,  as 
before  1870,  let  the  srockholder  again  have  a  chance  to 
make  something  as  well  as  the  bondholder,  let  the 
loaning  of  European  and  United  States  capital  in 
China,  Japan,  India,  and  Mexico  cease  to  be  a  form  of 
gambling,  and  a  volume  of  new  industry  would  spring 
up  to  which  the  slight  increment  of  gold  money  that 
started  it,  enlarged  by  all  the  credit  that  could  be 
based  upon  this,  would  be  utterly  inadequate,  making  a 
renewed  fall  of  prices  the  quick  and  sure  sequel.  So 
%at  an  amount  of  business  would  be  called  into  life  by 
10 


828  SILVER  AND  GOLD. 

an  arrest  lu  the  fall  of  prices  that  the  utmost  amoi.at 
of  money  which  the  coinage  of  gold  and  silver  both 
could  furnish  would  be  necessary  to  sustain  it.  No  in- 
flation, I  am  persuaded,  could  result  from  the  free 
coinage  of  both  metals,  could  it  be  made  general.  Both 
together  would  perhaps  be  able  to  sustain  prices,  but 
would  not  sensibly  raise  piices. 

A  second  reason  why  gold  alone  can  not  check  the 
fall  of  prices  is  that  the  moment  the  metal  obviously 
becomes  at  all  plentiful,  Austria  and  India  will  purchase 
vast  sums  that  they  may  place  themselves  completeVy 
on  a  gold  platform.  Japan  also  would  probably  at« 
tempt  to  change  from  silver  to  gold.  If  this  did  not 
turn  the  gold  plenty  to  penury  again,  other  silver 
nations  would  do  the  same.  You  can  not  permanently 
maintain  the  gold  standard  anywhere  unless  you  can 
do  it  everywhere.  The  world  of  con)merce  will  not 
brook  division  into  monetary  hemispheres.  It  will  not 
tolerate  the  chaos  of  one  basal  money  for  the  West  and 
another  for  the  East,  one  for  wealthy  centers  and  one 
for  cruder  communities,  one  for  the  motherland,  the 
other  for  colonies.  In  kind,  all  the  griefs  which  are 
moving  India  to  try  and  place  lier  feet  upon  gold  press 
Mexico,  all  Central  and  South  America,  Ceylon,  Mau- 
ritius, the  Straits,  Japan,  and  China  to  do  the  same ; 
and  no  possible  increase  to  the  world's  stock  of  gold 
will  enable  it  to  be  so  spread  out  The  conflict  for 
gold,  if  it  is  not  paired  with  silver,  must  be  not  only 
irrepresbible,  but  move  and  more  bitter  without  end. 

A  third  reason  for  denying  that  gold  alone  can  heal 
the  world's  monetary  lesion  is  as  follows :  Prof.  Shield 
Nickerson  makes  it  extremely  probable  that  when  silver 
falls  in  value,  as  it  probably  did  to  some  extent  during 


B.  BBKJAMIN  ANDREWS.  829 

1898  and  1894,  and  falls,  too,  in  consequence  of  causes 
directly  affecting  itself  and  not  in  the  first  instance 
reaching  gold  at  all,  still  the  gold  prices  of  interna- 
tional commodities  are  determined  by  their  silver  prices. 
That  is,  suppose  some  cause  in  the  gold-price  world  to 
be  so  affecting  the  relation  of  gold  to  commodities  at 
large  that,  if  you  could  annul  all  influence  from  the 
silver-price  world,  gold  would  cease  to  rise  in  value ; 
yet,  since  you  can  not  annul  that  influence,  if  silver 
goes  on  falling  in  relation  to  gold,  gold  will,  in  fact,  not 
cease  to  rise  in  value,  but  the  gold  prices,  in  gold  lands^ 
of  all  commodities  in  which  gold  and  silver  lands  com- 
pete, will  continue  to  fall. 

Were  silver  again  standard  money  everywhere,  the 
demand  for  it  would  be  so  great  that  its  marginal  cost, 
and  so  its  value  in  the  world *s  trade,  would  not  fall  but 
probably  rise,  prices  in  silver  faUiiig  to  correspond ; 
but  if  silver  remain  full  money  in  the  silver  lands 
only,  excluding  India,  the  demands  for  it  can  all 
be  met  at  such  a  marginal  cost  as  will  permit  the 
gold  price  of  silver  to  fall  and  prices  in  silver  lands  to 
rise,  slowly,  for  an  indefinite  time,  if  not  forever;  this 
fall,  through  the  whole  of  its  extent,  pulling  down  gen- 
eral prices  in  gold  lands. 

Facing  the  three  considerations  thus  presented,  I  can 
not  but  think  the  hope  of  monetary  relief  from  gold 
alone  wild  and  visionary  in  the  extreme. 

But  while  the  new  gold  does  not  modify  in  the 
slightest  the  need  of  restoring  silver  to  its  old  rdle  as 
full  money,  it  triumphantly  answers  the  only  argument 
which,  with  me,  ever  had  any  weight  against  trying  to 
restore  silver.  Hans  Forssel,  of  Sweden,  following 
Professor  Lexis,  argued  in  the  Monetary  Conference  of 


880  KfjYKiiB  AND  GOLD. 

1892  that  however  large  any  international  x>ool  of  gold 
and  silver  might  be,  making  it  perfectly  impossible  for 
its  gold  to  leak  out  of  it,  its  gold  might  become  so 
scarce  as  to  be  loH  in  it.  This  objection  to  bimetallist 
effort  then  had  some  force,  but  the  output  of  new  gold 
now  deprives  it  of  all  validity  whatever. 


BDWA&D  ATKlKSOir.  881 


CHAPTER  XV. 

THB  BANKING  PBTNOIPLB — BY  EDWABD  ATKIKSOK. 

Befobb  dealing  with  mj  main  subject  certain  exist- 
ing conditions  will  be  stated. 

It  is  becoming  evident  that  the  great  body  of  think- 
ing people  in  this  country  are  realizing  the  necessity 
for  an  adjustment  of  our  banking  system  to  the  present 
conditions  of  our  trade  and  commerce.  It  is  also  be- 
coming evident  that  both  the  bankers,  business  men 
and  students  of  every  kind  who  try  to  master  details 
and  principles  as  well  as  the  mass  of  the  people  who 
have  not  time  to  master  details  but  are  governed  by 
common  sense  (of  course  omitting  populist  and  cur- 
rency cranks),  have  reached  the  conclusion  that  there 
must  be  a  unit  or  standard  of  value,  either  monometal- 
lic or  bimetallic,  which  shall  be  the  lawful  money  in 
which  all  notes  and  subsidiary  or  undervalued  coins 
which  bear  the  semblance  of  money,  whether  of  the  na- 
tion or  of  the  banks,  shall  be  promptly  redeemed  on  de- 
mand. 

There  is  a  difference  in  judgment  between  what  are 
called  ^'  monometallists  "  and  ^  bimetallists  "  as  to 
whether  that  standard  and  unit  of  value  shall  consist 
simply  and  singly  of  a  fixed  weight  of  gold  converted 
into  coin,  or  of  gold  and  silver  held  together  at  a  fixed 
ratio  of  weight  by  an  international  treaty  or  agreement. 
That  discussion  holds  no  necessary  part  in  the  consid- 
eration of  the  system  of  banking  or  of  the  banking 


S8S  dttVB^  AKt>  ooLb. 

principle,  it  being  a  separate  and  distinct  issue.  Neither 
monometallists  nor  bimetallists  give  any  support  to  the 
suggestion  for  the  free  coinage  of  silver  at  the  present 
ratio  of  sixteen  to  one  without  the  co-operation  of 
other  nations,  nor  do  they  give  any  support  to  the  ad- 
vocates of  fiat  or  legal  tender  paper  money  to  be  sup- 
plied by  the  nation. 

Those  who  might  and  may  soon  unite  in  the  support 
of  a  sound  system  of  banking  under  which  all  notes  of 
every  kind  shall  be  subject  to  prompt  redemption  on 
demand  in  the  lawful  standard  or  unit  of  value,  are  at 
present  unable  to  act  together  for  certain  reasons. 
Many  of  the  elder  men  who  have  a  thorough  knowl- 
edge of  the  practice  of  banking  are  affected  in  their 
judgment  of  the  course  which  should  now  be  taken  by 
their  recollection  of  the  difficulties  and  dangers  of  what 
has  become  known  as  the  ^^  wild-cat  banking  and  bank 
notes"  of  the  ante-war  period.  Many  other  men  of 
sound  judgment  are  governed  by  the  sense  of  the  bene- 
fit which  was  gained  by  the  establishment  of  the  Na- 
tional bank  system  and  through  the  circulation  of  the 
National  bank  notes  secured  by  United  States  bonds. 
Great  masses  of  people  who  possess  votes,  and  there- 
fore influence,  are  affected  by  the  delusion  that  it  is 
necessary  that  there  should  be  a  very  large  supply  of 
the  small  instruments  of  exchange  (notes  and  specie) 
which  pass  from  hand  to  hand.  With  many  persons 
the  only  conception  of  money  is  limited  to  such  small 
notes,  National  or  bank,  as  the  case  may  be,  and  to  the 
coins  which  pass  from  hand  to  hand. 

In  dealing  with  the  reform  of  our  banking  sjrstem  all 
these  variations  in  judgment  or  in  imagination  must  of 
necessity  be  considered.    It  therefore  follows  that  any 


plan  thac  can  be  suggested  with  any  prospect  of  its  be- 
ing considered  and  passed  by  congress  must  be  prepared 
80  as  to  meet  these  existing  conditions. 

In  the  subsequent  treatise  I  have  endeavored  to  pro- 
vide a  way  for  the  adoption  of  a  true  banking  principle 
in  the  issue  and  circulation  of  bank  notes.  I  have  also 
endeavored  to  provide  for  such  an  extension  of  banking 
in  remote  districts  through  the  establishment  of 
branches  as  may  overcome  the  prejudice  of  ignorant  or 
uninformed  people  against  banks  and  bankers  by  ena- 
bling them  to  learn  for  themselves  that  the  bank  or 
banker  who  conducts  the  business  under  safe  conditions 
is  the  next  friend  of  the  farmer,  the  manufacturer  and 
the  mechanic  alike ;  rendering  to  all  a  most  valuable 
service  in  consideration  of  a  reasonable  profit  which 
such  banks  and  bankers  may  secure  in  the  conduct  of 
their  work,  either  as  banks  of  deposit  or  by  the  issue 
of  notes.  Consistently  with  these  motives  and  consid- 
erations I  have  endeavored  to  make  what  I  believe  to 
be  the  true  banking  principle  as  plain  as  it  may  be 
made,  by  pointing  out  what  I  believe  to  be  errors  or 
delusions  and  thus  removing  much  of  the  complexity 
with  which  the  subject  has  been  obscured. 

The  object  of  this  paper  is  therefore  to  bring  four 
main  points  into  conspicuous  notice. 

1st.  How  impossible  it  is  for  the  government  to 
provide  or  supply  money  for  the  transaction  of  busi- 
ness. 

2d.  How  safely,  surely  and  simply  the  community 
will  supply  itself  with  all  the  money  that  it  can  use, 
provided  it  is  left  as  free  from  legal  restrictions  as  pos* 
uble. 

8d.  That  the  safest  custodians  of  the  business  of  the 


t\ 


34  SILVEK   AND  GOLD. 


country,  including  banks,  are  the  men  who  conduct  the 
commerce  of  the  country. 

4th.  How  surely  a  safe  supervision  will  be  exerted 
over  ba^k  note  issues  by  banks  and  bankers  themselves, 
since  upon  /hem  must  fall  the  greater  part  of  the  losses 
which  would  ensue  from  bad  methods  of  banking  and 
from  the  is3ue  of  bank  notes  of  an  unsafe  kind. 

Bank  notes  Issued  consistently  with  the  true  prin« 
ciple  of  banking  must  rest  wholl}''  upon  the  general  as- 
sets commonly  called  the  business  or  commercial  paper 
which  is  discounted  by  banks.  Bank  notes  secured  by 
a  deposit  of  bonds  or  mortgages  require  that  the  cap- 
ital of  the  bank  which  might  otherwise  be  used  for  dis- 
counting business  paper  shall  have  been  invested  in 
such  bonds,  thus  limiting  the  ability  of  the  bank  to  dis- 
count commercial  paper  by  the  amount  of  capital  thus 
invested. 

Since  the  enactment  of  the  National  Bank  Act  all 
the  conditions  of  the  country  have  profoundly  changed. 
Capital  has  increased  enormously,  and  by  means  of  the 
railway  express  and  telegraph  services  the  whole  coun- 
try may  be  said  to  have  become  a  unit  for  banking  pur- 
poses. 

The  present  quick  and  ready  communication  through** 
out  the  country  would  now  render  the  issue  of  bank 
notes,  redeemable  under  what  w«is  known  as  the  old 
Suffolk  Bank  system  of  redemption  in  New  England, 
as  safe  and  sure  as  that  system  then  was  prior  to  1861 
and  as  the  Canadian  system,  which  is  analogous  to  it,  is 
at  the  present  time. 

It  is  an  axiom  in  banking  that  the  consumption  of 
the  goods  or  commodities  of  which  bankable  paper  is 
the  transferable  title,  is  the  source  of  the  power  for 


EDWABD  ATKIKSOH  885 

paying  ^s  representative  note,  draft  or  bill  of  exchange 
which  the  bank  has  discounted.  About  one-half  the 
business  of  this  country  consists  in  the  production, 
conversion  and  final  sale  for  consumption  of  articles  of 
food,  f  his  consumption  of  food  cannot  stop  even  in 
the  hardest  of  hard  times,  because  the  most  productive 
country  is  always  witliin  about  one  year  of  starvation 
— hence  it  follows  that  bank  notes  issued  and  circulated 
in  farming  districts,  i.  e.,  notes,  drafts  and  bills  of  ex- 
change which  are  representative  of  the  production  and 
distribution  of  the  products  of  the  farm,  as  well  as 
credits  granted  to  market  men,  grocers  and  other  deal- 
ers in  food  material,  may  or  must  be  sure  of  prompt  re- 
demption  if  due  care  is  exercised  in  granting  such 
credits.  The  very  prompt  payment  of  this  class  of 
paper  was  very  noticeable  during  the  recent  panic.  A 
large  part  of  the  food  cannot  be  kept  long  and  each 
year's  product  must  be  almost  wholly  consumed  in  any 
given  period  if  not  exceeding  twelve  months.  On  the 
other  hand,  notes  or  drafts  representative  of  whiskey 
might  be  slower  of  redemption  because  the  liquor  im- 
proves by  age.  If  a  separate  series  of  bank  notes 
were  issued  year  by  year  specifically  secured  on  each 
year's  product  of  whiskey,  redeemable  at  its  market 
value  equivalent  to  and  proportionate  with  age,  such 
notes  would  gradually  become  worth  a  premium  as  each 
series  became  of  older  date.  Whiskey  notes  thus  re- 
deemable would  be  in  marked  contrast  to  silver  notes 
issued  on  a  bullion  purchase  or  deposit.  Had  United 
States  notes  been  redeemable  only  at  the  market  value 
of  the  silver  bought  by  the  government  since  1878 
they  would  now  be  4fpi*^<uated  one -half.    The  fear  of 


S&6  SILVEB  ANi>  GOli). 

this  loss  has  lately  promoted  a  most  wholesome  domand 
for  the  redemption  or  fundiug  of  these  notes. 

No  private  banker  or  incorporated  bank  wou]iir.  ever 
have  issued  its  notes  upon  such  a  poor  security  as 
silver.  Neither  would  any  private  banker  or  incorpo- 
rated bank  have  ever  placed  itself  in  the  grotesquely 
absurd  position  in  which  a  series  of  incapable  con- 
gresses have  put  the  treasury  of  the  United  States. 
The  government  has  issued  its  promises  to  pay  on  de- 
mand for  a  little  less  than  $500,000,000  for  the  pur- 
chase of  silver  bullion  and  for  the  conversion  of  ^Hrade 
dollars,"  which  it  now  holds  in  its  vaults  under  condi- 
tions which  forbid  its  use  or  sale.  The  only  resource 
of  the  government  for  the  redemption  of  these  notes  is 
therefore  through  the  exercise  of  its  power  of  taxation. 
When  for  a  time  the  revenue  from  taxes  becomes  in- 
sufficient for  such  redemption  it  must  borrow  on  inter- 
est-bearing bonds  in  order  to  defer  payment  for  a  time 
without  recourse  to  the  silver,  as  it  has  done. 

In  support  of  the  theory  that  a  true  and  safe  banking 
system  for  supplying  small  notes  for  circulation  from 
hand  to  hand,  based  on  general  assets  consistently  with 
the  ^^  banking  principle,"  certain  very  close  estimates 
of  possible  loss  will  now  be  submitted.  From  the  best 
analysis,  tested  in  many  ways,  that  I  have  been  able  to 
make,  I  have  become  satisfied  that  the  average  annual 
product  of  the  people  of  this  country  per  capita  is  now 
in  excess  of  what  $200  in  gold  will  buy  at  retail  prices 
in  one  year.  That  was  my  conclusion  in  1880.  This 
per  capita  estimate  would  make  the  total  annual  prod- 
uct of  1894  nearly  $14,000,000,000  worth  of  food, 
fuel,  fibres  and  fabrics  of  every  kind.  Substantially 
one  in  three  of  the  population  is  occupied  in  gainful 


lEbWAttD   ATKINSON.  ^t 

pursuits,  each  one  sustaining  two  dependents  oo  Ue 
average.  At  the  estimate  of  $200  worth  peL  capita, 
the  average  proportion  of  our  annual  product  falling  to 
each  pei*8on  occupied  for  gain  would  come  to  9600 
worth  if  it  were  distributed  uniformly  per  capita  at 
retail  prices. 

Out  of  this  product  the  National,  State  and  municipal 
taxes  take  substantially  $12  per  head,  or  6  per  cent,  of 
the  product  on  which  share  those  who  do  government 
work  are  sustained.  The  additions  to  the  wealth  of 
the  country  on  the  very  careful  estimates  of  the  Census 
Depailment  in  the  last  decade  were  in  ten  years  $180 
per  capita,  of  which  probably  more  than  $80  repre- 
sented the  rise  in  the  value  of  land.  The  remainder 
was  the  share  of  the  product  added  to  capital  at  the 
average  rate  of  $10  a  year  per  capita,  or  5  per  cent,  of 
the  computed  product. 

This  estimate  does  not  cover  the  entire  gain  in 
wealth,  which  is  made  apparent  by  the  computations. 
It  is  the  measure  of  the  gain  in  the  average  capital  per 
head,  upon  the  basis  of  the  census  figures,  which  are 
doubtless  as  near  the  mark  as  it  is  possible  for  such  ap^ 
proximate  estimates  to  be.  The  population  of  1890 
computed  at  62,622,250  shows  a  gain  of  12,466,467  over 
the  population  of  1880,  which  was  50,165,78&  The 
population  added  in  the  decade  had,  therefore,  attained 
property  to  the  average  amount  of  1880,  to  wit,  $870 
per  head.  In  addition  to  this,  the  whole  population  of 
1890  possessed  an  average  valuation  of  $1,000  per  head 
— a  gain  of  $180  each,  including  the  whole  number  enu« 
mei*ated  in  1890.  It  is  this  gain  in  wealth  which  I 
have  divided  by  estimate,  as  land  valuation  $30,  rail* 
roads,  canab,  buildings,  public  and  private,  furniture, 


338  StLVBft  AND  G0L1>. 

mines,  machinery,  tools,  implements  and  products  on 
the  way  from  producer  to  consumer  $100  on  the  average 
to  each  person.  It  is  this  addition  to  capital  which 
comes  to  910  a  year  and  which  represents  a  daily  con- 
tribution of  each  person  to  the  capital  added  in  the  decade 
of  2.74  cents  a  day  to  this  increase.  What  the  bearing 
of  this  is  upon  the  question  of  the  distribution  of  the 
annual  product  will  presently  appear. 

In  view  of  the  rise  in  the  rate  of  wages  between  1880 
and  1890,  the  lessening  mar^  of  profit  and  the  i*educ- 
tion  in  the  rate  of  interest,  it  is  plain  that  the  average 
product  increased  and  probably  amounted  in  1890  to 
what  $225  a  year  would  buy  at  retail  prices,  or  $200 
free  of  taxes  and  of  contributions  to  capital.  These 
problems  become  more  easily  comprehended  when  re- 
duced to  terms  per  day. 

If  this  computation  of  $225  is  approximately  coiTcct 
the  annual  product  of  70,000,000  people  would  possess 
a  valuation  at  retail  prices  of  $16,750,000,000.  This 
product  is  the  subject  of  trade  and  commerce  less  what 
is  consumed  directly  by  those  who  produce  it.  It  is 
our  provision  for  shelter,  food,  fuel,  clothing  and  other 
material  wants. 

This  product  which  is  the  subject  of  commerce  be- 
comes more  comprehensible  when  reduced  to  terms  of 
daily  demand  and  supply.  Two  hundred  and  twenty- 
five  dollars'  worth  divided  by  865  days  comes  per  day 
to 61910 

$12  assigned  to  taxation  comes  to    •    •    8.29 

$10  added  to  capital  comes  to  •    •    .    •    2.74 

.603c 


Reminder • 5588o 


SDWABD  ATKINSOK.  889 

This  remainder  may  be  held  to  represent  the  average 
expenditure  of  the  mass  of  the  people  for  other  pur- 
poses than  taxation  and  additions  to  capital,  as  for 
shelter,  food,  fuel,  clothing  and  sundries. 

Assuming  a  basis  of  one  in  three  occupied  for  gain 
this  sum  of  .5588  cents  per  day  represents  an  income 
and  expenditure  of  $1,676  per  day,  which  sum  multi- 
plied by  365  days  comes  to  $611.77  per  year,  to  each 
person  occupied  for  gain  and  two  dependents.  A  com- 
parison of  this  estimate  with  the  average  earnings  dis- 
closed by  the  census  and  by  Commissioner  Wright's  re- 
ports goes  far  to  sustain  the  very  close  approximation 
ef  these  figures  to  the  facts. 

It  is  a  startling  fact  that  great  as  the  product  of  this 
country  is — far  greater  ratably  than  that  of  Atif  other, 
— yet  the  average  person  must  be  sheltered,  warmed, 
fed  and  clothed  from  what  55  to  60  cents  a  day  will  buy 
at  retail  prices.  Yet  that  is  the  measure  of  all  there  is 
produced  at  my  estimates,  which  are  very  much  higher 
than  those  of  most  students.  When  I  have  endeavored 
to  prove  that  adult  men  and  women  can  secure  com- 
fortable rooms,  well  warmed  and  lighted,  adequate 
clothing  and  full  nutrition  in  the  city  of  Boston  on  an 
expenditure  of  not  over  $200  a  year,  my  statements 
have  been  received  with  incredulity  or  derision,  and 
sometimes  with  obloquy  and  personal  abuse,  yet  there 
is  a  vastly  greater  number  of  people  in  the  United 
States  that  have  less  than  that  sum  to  spend  than  theie 
are  who  have  more. 

Whether  these  computations  are  exact  or  not  thny 
are  sufficiently  near  to  serve  as  a  good  working  hypoth- 
esis in  the  subsequent  analysis  of  the  trade  of  the 
country  and  its  connection  with  banking. 


840  firLYEB  ANI>  GOLD. 

Assuming,  as  I  think  we  safely  may,  that  the  prod- 
net  is  now  sufficiently  in  excess  of  $200  worth  per 
head  to  meet  taxation  and  additions  to  capital,  there 
would  remain  $200  worth  per  head  on  the  average  to 
be  expended  or  consumed  by  each  person.  This  ex- 
penditure would  be  in  about  the  following  proportions: 
$90  to  $100  for  food,  fuel  and  light ;  $26  to  $40  for 
clothing,  carpets  and  other  textiles;  $26  to  $40  for 
rent,  and  the  remainder  for  sundries ;  each  person  shar- 
ing this  product  by  the  measure  of  his  earnings,  wages, 
profits  or  other  modes  of  distribution. 

A  part  of  the  food  supply  is  consumed  whei*e  it  is 
produced.  We  may  estimate  that  at  $80  worth  per 
head,  which  would  be  a  very  large  average  proportion  of 
the  food  which  is  not  bought  and  sold.  There  remains 
$170  worth  of  food,  fuel,  fibres  and  fabrics,  which  are 
the  subjects  of  commerce — that  is  to  say,  of  purchase 
and  sale. 

Let  any  one  consider  the  known  facts  as  to  the  deal- 
ings in  these  materials.  For  instance,  a  credit  is 
granted  by  a  storekeeper  to  the  grower  of  cotton  in 
the  South  at  very  exorbitant  charges ;  the  storekeeper 
really  being  the  banker  of  the  community,  where  banks 
and  bankers  are  subjected  to  prejudice  and  suspicion, 
and  therefore  cannot  safely  serve  the  community.  The 
storekeeper  having  granted  a  credit  to  the  grower  sells 
the  bale  of  cotton  to  the  dealer,  he  then  buys  his  goods 
on  credit,  longer  or  shorter, — the  dealer  sells  the  cotton 
tr  the  factory,  the  manufacturer  sells  the  cloth  directly 
or  through  a  commission  merchant  to  the  converter  or 
to  the  jobber, — ^finally  it  is  sold  again  in  the  form  of 
clothing.  All  these  transfers  or  conversions  are  worked 
by  separate  bargains  and  sales,  each  one  of  whioh  is 


XDWABD  ATKINSOK.  841 

transacted  on  credit  or  by  passing  cash.  Western 
grain  is  sold  by  the  farmer  to  the  miller  or  his  agent, 
the  flour  is  sold  by  the  miller  to  the  merchant,  by  the 
merchant  to  the  baker;  finally  the  bread  passes  mostly 
through  shops  before  it  reaches  the  consumer.  The 
great  number  of  conversions  of  timber  and  metal  into 
buildings,  machinery,  etc.,  are  to  be  considered.  So  it 
is  in  every  branch.  Every  trade,  bargain  or  conversion 
from  the  crude  to  the  finished  product  involves  a  pur- 
chase and  sale ;  it  is  therefore  worked  by  the  use  of 
instruments  of  credit  or  transferable  titles,  such  as 
notes,  drafts,  bank  credits  and  bills  of  exchange.  It  is 
conducted  in  least  proportion  by  tlie  passing  of  cash  in 
some  for.n  or  lawful  money. 

There  Js  another  set  of  monetary  transactions  in  the 
work  of  transportation.  During  the  last  year  which  I 
analyzed,  I  think  it  was  1892,  22,000  pounds  of  food, 
fuel,  fabrics  and  fibres  were  moved  110  miles  by  steam 
railways  .only,  for  every  man,  woman  and  child  of  our 
population,  taking  no  account  of  transportation  by 
rivers  and  canals.  Retail  transportation  by  wagons 
costs  more  than  wholesale  transportation  by  railway. 
It  costs  more  to  distribute  loaves  of  bread  through 
shops  and  by  bakers*  carts  than  any  other  element  in 
the  cost  of  bread.  Here  again  are  bar^^ains  and  sales 
in  almost  infinite  number. 

Now,  if  we  estimate  only  three  transactions  on  only 
$170  worth  of  food,  fuel,  fibres  and  fabrics  to  each  per- 
son, the  trade  of  the  country,  which  is  worked  in  great- 
est measure  by  instruments  of  credit  or  negotiable 
titles,  and  in  least  proportion  by  the  passing  of  cash, 
comes  to  over  $600  per  head  each  year.  We  now 
number  70,000,000  people.    At  three  conversions  only 


842  8ILYEB  AND  GOLD. 

from  producer  to  consumer,  tbe  volume  of  our  mercan« 
tile  transactions  would  come  to  $85,000,000,000  a  year. 
It  is  probably  much  more. 

All  the  wholesale  transactions  and  a  large  part  of  the 
retail  trade  are  conducted  by  instruments  of  credit  or 
negotiable  titles,  Lnown  as  notes,  drafts,  bills  of  ex- 
change and  checks,  or  on  book  accounts  or  credits 
granted  by  retail  dealers ;  a  part  of  the  retail  trade  only 
is  conducted  by  what  is  called  cash,  L  e.  by  the  use  of 
small  notes  and  small  change. 

The  demand  for  more  money  in  legal  tender  notes  or 
silver  dollars  is  made  by  persons  who  have  no  conoep> 
tion  of  the  true  conditions  of  trade.  In  their  mis- 
directed efforts  to  provide  by  legislation  for  the  issue 
of  fiat  money  or  by  the  free  coinage  of  silver,  they  have 
created  distrust  and  have  thereby  brought  ou  a  panic 
accompanied  by  a  partial  paralysis  of  trade,  thus  reduc- 
ing prices  by  their  very  effort  to  increase  them. 

It  is  the  function  of  banks  and  bankers  to  deal  with 
these  transferable  titles  or  representative  instruments 
of  the  exchange  of  property.  Banks  do  not  deal  in 
money.  The  notes,  drafts,  bills  of  exchange  and  bank 
deposits  are  representative  of  the  property  passing  by 
title  in  money  from  the  producers  to  the  consumers. 
These  instruments  of  credit  are  adjusted  in  amount  to 
the  quantity  and  value  of  the  property  of  which  the 
titles  in  terms  of  money  a^  in  process  of  exchange. 
This  process  is  automatia  A  small  proportion,  esti- 
mated variously  at  from  6  to  10  per  cent,  of  these 
transactions,  is  conducted  by  the  use  of  bank  notes, 
legal  tender  notes,  or  small  bills  of  various  kinds  and 
specie  or  small  change,  ninety  to  ninety*five  per  cent 
without  the  passing  of  any  money  from  hand  to  hand. 


HORACE:  BOIEK, 


BDWABD  ATKINSON.  M5 

Keeping  in  mind  the  magnitude  of  these  transactions, 
the  figures'  of  mercantile  losses  of  the  last  three  years 
give  a  clue  to  the  proportion  of  lo&ses  by  mercantile 
failures  on  all  discounts  of  business  paper  incurred  by 
banks  and  bankers,  merchants  and  traders.  Of  course 
we  have  no  clue  in  these  figures  to  the  losses  of  retail 
dealers  from  default  of  payment  by  their  customers, 
when  the  dealers  do  not  fail  themselves,  but  we  have  a 
very  close  measure  of  the  losses  on  the  larger  transac- 
tions in  which  banks  and  bankers  are  concerned. 

On  the  ^  Bradstreet's  *'  figures  lately  published,  the 
losses  in  1894  by  mercantile  failures  were  $80,000,000, 
— a  very  large  sum  when  considered  as  a  unit,  but  a 
very  small  fraction  when  considered  in  proportion  to 
the  total  transactions.  This  loss  computed  on  a  trade 
of  $35,000,000,000  comes  to  only  22  86400  per  $100,  or 
less  than  a  quarter  of  1  per  cent.  The  losses  in  the  panic 
year  were  $163,000,000,  double  those  of  1894,  but  yet 
less  than  a  half  of  1  per  cent,  on  the  total  trade.  In 
1892  the  losses  were  $60,000,000,  or  less  than  a  fifth  of 
1  per  cent,  on  the  trade  of  that  year,  which  was  con- 
ducted under  normal  and  safe  conditions  before  the 
danger  of  national  discredit  had  become  apparent  to  the 
multitude. 

From  these  figures  one  can  judge  of  the  absolute  se- 
curity of  a  banking  system  in  which  prudent  bankers 
deal  with  transferable  titles  to  this  great  volume  of  the 
necessaries,  comforts  and  luxuries  of  life  in  monetary 
terms  established  on  a  stable  unit  of  redemption.  The 
losses  by  bad  debts  in  the  wholesale  tra£5c  in  a  very 
large  number'of  establishments  with  which  I  happen  to 
be  personally  familiar,  have  not  been  a  tenth  of  1  per 
oent.  per  annum  during  the  last  ten  years.  Hence  it 
20  ^.  — : 


.> ., '    ''-  ■■■-  - 


ri 


1  i 


i 


846  SILVER   AND  GOLD. 

follows  that  no  well  managed  bank  loses  a  quarter  of  1 
Der  cent,  per  annum  under  a  sound  monetary  system, 
or  25  cents  per  $100  on  its  discounts  of  mercantile 
paper.  The  government  attempts  to  exert  no  super- 
vision over  these  titles  to  property  in  the  form  of  notes, 
drafts  and  bills  of  exchange  which  are  discounted  by 
banks ;  if  the  government  attempted  any  such  super- 
vision it  would  be  a  futile  waste  of  effort. 

Such  being  the  facts,  what  bond  or  security  of  any 
kind  can  be  equal  to  this  great  volume  of  bankable 
paper,  which  constitutes  the  chief  element  of  bank  as- 
sets, representative  of  commodities  of  which  the  con- 
sumption assures  the  redemption  of  such  small  notes  as 
may  be  needed  for  the  conduct  of  a  part  of  the  final  re* 
tail  traffic  of  the  country  ?  Yet,  because  these  notes 
have  the  semblance  of  money  some  additional  protec- 
tion may  be  given  to  holders  by  rendering  stockholders 
liable  and  by  making  these  notes  which  possess  a  sem- 
blance of  money  the  first  lien  on  the  assets  of  the 
banks ;  but  that  redemption  must  be  in  true  money. 

The  best  definition  of  true  money  is  that  of  Henri 
Cernuschi,  the  most  prominent  advocate  of  what  is 
called  bimetallism.  '^It  is  by  the  ordeal  of  fire  that 
money  may  be  tried.  The  coins  which,  being  melted 
down,  retain  the  entire  value  for  which  they  were  legal 
tender  before  being  melted  down,  are  good  money. 
Those  which  do  not  retain  it  are  not  good  money." 

Little  more  can  be  needed  to  secure  redemption  in 
these  days  of  clearing-housef  iLnd  telegraphs  than  the 
quick  and  close  supervision  rf  one  bank  over  another 
through  the  clearing-house.  No  "wild  cat"  bank 
could  possibly  put  "  wild  eat  *  notes  into  circulation 
under  present  conditions* 


EDWABD  ATKINSON.  M7 

Meainres  would  at  once  be  taken  by  bank  associa* 
tions  or  clearing-houses  by  which  the  prompt  redemp* 
tion  of  bank  notes  could  be  as  absolutely  assured  as  it 
was  formerly  in  New  England  under  the  Suffolk  sys* 
tern  in  Boston,  and  is  now  in  Canada.  Under  this  sys- 
tem the  government  would  soon  be  rapidly  divested  of 
any  connection  with  the  supply  of  the  currency,  except 
the  supervision  of  the  clearing-houses  by  the  Comp- 
troller. 

It  has  become  evident  that  whenever  a  safe  and  suit- 
able bank  note  currency  is  permitted  to  be  supplied  by 
bants,  which  will  adjust  itself  automatically  to  the 
business  of  the  country,  the  demand  notes  of  the  United 
States  now  circulating  by  force  will  be  presented  for 
redemption  or  funding,  thus  divesting  the  government 
of  any  connection  with  the  issue  of  notes  and  taking  it 
out  of  the  business  of  banking  for  which  it  is  unfit. 

The  Administration  now  holds  complete  power  for 
the  redemption  of  these  notes  by  the  issue  of  6  per 
cent,  bonds  under  the  resumption  act.  Public  opinion 
is  becoming  so  rapidly  concentrated  on  the  lines  of 
sound  banking  and  sound  money  as  to  make  it  very 
certain  that  the  next  congress,  whenever  it  meets,  will 
obey  the  public  mandate  on  these  lines  without  much 
regard  to  mere  party  lines. 

There  are  many  matters  of  detail  which  net.  I  not  be 
treated  at  length.  The  writer  is  profoundly  convinced 
that  he  has  underestimated  the  sum  total  of  the  bar- 
gains and  sales  or  mercantile  transactions  which  are 
necessary  to  the  distribution  of  our  annual  product. 
The  volume  of  trade,  aside  from  real  estate,  stocks  and 
bonds,  doubtless  comes  to  over  $100,000,000  a  day  for 
9very  day  in  the  year,  including  holidays  and  Sundays. 


848  SILVEB  AND  GOLD. 

In  80ch  case  the  proportion  of  losses  from  bad  debts  on 
mercantile  transactions  in  the  necessaries,  comforts  and 
luxuries  of  life  comes  to  less  than  the  proportion  which 
has  been  indicated.  If  it  be  true  that  even  in  a  panic 
year  the  losses  by  mercantile  failures  have  been  less 
than  a  half  of  1  per  cent,  on  the  total  volume  of 
transactions,  then  a  tax  of  one-half  of  1  per  cent.,  im- 
posed through  the  clearing-houses  and  held  by  the 
Comptroller  of  the  Currency  for  their  protection,  would 
be  far  more  than  ample  for  the  ultimate  redemption  of 
all  notes  issued  by  all  banks  authorized  to  issue  them. 
An  additional  tax  of  one  half  of  1  per  cent.,  making  a 
total  tax  on  circulating  notes  of  one  per  cent.,  would 
be  equitable  in  consideration  of  the  supervision  of  the 
government  through  the  clearing-houses.  If  the  reve- 
nue and  redemption  tax  on  bank  note  circulation  were 
thus  limited  to  1  per  cent,  without  other  restrictive 
provisions,  like  the  deposit  of  bonds  or  legal  tender 
notes  or  other  unnecessary  security,  the  whole  capital 
of  the  banks  would  be  available  for  business  purposes, 
and  the  profit  on  the  circulation  in  excess  of  1  per 
cent,  would  be  quite  sufficient  to  induce  the  creation 
of  a  volume  of  bank  note  currency  which  would  auto- 
matically adjust  itself  to  the  conditions  of  business  year 
by  year ;  such  a  currency  would  also  adjust  itself  to 
the  variation  in  trade  season  by  season  in  each  year. 
Under  the  present  conditions  of  compulsory  reserve  on 
deposits  and  investment  of  capital  in  bonds,  the  bank- 
ing community  is  legally  forbidden  either  to  extend 
support  to  merchants  or  its  note  circulation  at  the  very 
time  when  both  are  most  needed.  On  the  other  hand, 
banks  may  be,  and  often  are,  oppressed  by  the  accu- 
mulation of  government  notes  which  cannot  be  used 


SDWABD  ATKIKSOK.  849 

except  in  unwholesome  speculation  at  the  period  when 
there  is  little  or  no  call  for  small  note  circulation. 

A  single  very  superficial  objection  to  the  State  bank 
issue  of  notes  is  that  travelers  might  be  forced  to  take 
bank  notes  in  change  which  could  not  be  used  when 
outside  of  the  section  in  which  that  bank  happened  to 
be  situated.  A  simple  reference  to  the  very  extensive 
system  and  use  of  travelers*  checks  and  money  orders 
issued  by  the  American  Express  Company  and  others, 
gives  the  clue  to  the  ready  method  in  which  all  these 
petty  objections  can  be  met.  The  American  Express 
Company  and  others  which  issue  checks  have  some- 
thing like  6,000  branches.  Their  travelers'  checks  are 
convertible  into  cash  that  is  in  customary  use  in  every 
part  of  this  country,  and  in  nearly  every  part  of  Eu- 
rope at  these  branch  offices.  Other  express  companies, 
such  as  the  Wells-Fargo  Co.,  the  Adams  Express  Com- 
pany, and  many  others,  issue  money  orders.  The  total 
number  of  branches  at  which  these  checks  and  orders 
can  be  cashed  number  over  20,000. 

In  fact,  these  travelers*  checks,  issued  by  express 
companies  payable  not  only  in  all  parts  of  this  country 
but  in  many  parts  of  Europe,  are  also  convertible  into 
the  cash  of  other  countries,  not  only  at  regularly  estab- 
lished agencies,  but  at  hotels,  railroad  stations,  etc.,  in 
many  parts  of  the  world.  The  printed  supplement  to 
the  United  States'  list  of  the  correspondents  of  the 
American  Express  Company,  where  their  checks  may 
be  converted  into  the  cash  of  the  country,  includes 
niauy  places  in  Asia,  Africa,  Mexico,  South  and  Cen- 
tral America  and  the  West  Indies — even  in  Jerusalem. 

Vny  change  in  our  banking  methods  might  be  rightly 
accompanied  by  permission  to  the  great  city  bank^  tq 


S60  StLVER  AND  GOLD. 

establish  branches  all  over  the  country,  wherever  they 
might  please,  or  in  specific  clearing-house  districts. 
This  would  tend  not  only  to  equalize  the  rate  of  inter- 
est and  to  carry  capital  from  the  congested  centers  in 
the  cities  to  the  very  confines  of  the  country,  as  this 
system  does  in  Scotland.  It  w^ould  tend  to  remove  all 
objection  that  can  be  raised  in  respect  to  the  circula- 
tion and  ready  redemption  of  State  bank  notes.  If  ex- 
press corporations  find  it  for  their  interest  to  issue 
checks  and  money  orders  and  conduct  their  business 
with  safety  in  the  service  of  those  who  choose  to  avail 
themselves  of  it,  the  question  may  well  be  asked  why 
banks  should  be  deprived  of  the  same  privilege  which 
would  work  a  service  in  the  distribution  of  their  more 
ample  capital  as  much  greater  as  their  functions  and 
capital  are  greater  than  those  of  an  express  company. 

The  eleven  great  banks  in  Scotland  have,  I  believe, 
over  1,000  branches  in  that  small  State  of  a  little  over 
4,000,000  people.  The  thirty-eight  Canadian  banks 
have  460  branches,  extendhig  from  Halifax  on  the  east 
to  Vancouver  Island  on  the  west  coast. 

What  but  profound  ignorance  and  jealousy  of  banks 
and  bankers  prevents  the  people  of  this  country  secur- 
ing the  same  service  vnth  the  corresponding  benefits 
in  the  wide  distribution  of  capital  and  in  equalizing 
the  rates  of  interest  thereon  ? 

The  deductions  which  muse  ensue  from  these  prem- 
bes,  if  they  are  approximately  correct,  may  be  stated 
in  the  following  terms : 

1st. — There  must  be  a  lawful  unit  of  value  which 
will  serve  as  the  standard  of  all  transactions,  bai'gaanS| 
sales  and  exchanges. 

2d. — ^Duality  in  a  unit  is  unthinkable. 


M)WAKb  ATKINSON*  86i 

Sd. — The  present  lawful  single  standard  or  unit  of 
Yalue  of  the  United  States  is  a  dollar  made  of  gold. 

4th. — Legal  tender  acts  work  by  forcing  a  substitute 
for  the  lawful  unit  of  value  into  circulation  which 
when  not  instantly  convertible  or  redeemable  at  the 
standard  of  the  lawful  unit  become  distrusted  and  pres- 
ently depreciated. 

5th. — As  wealth  and  intelligence  increase,  the  ex- 
change of  services  and  products  in  which  commerce 
consists  is  augumented  much  more  rapidly  than  thi^ 
growth  of  population* 

6th. — With  this  growth  of  commerce  the  use  of  in- 
struments of  credit  in  place  of  coin  is  also  greatly  in- 
creased, while  the  circulation  of  the  coin,  which  is  the 
unit  of  value,  is  reduced. 

7th. — The  right  of  place  for  the  coin  which  is  the 
unit  of  value  is  in  the  reserves  of  banks  and  bankers,  by 
whom  the  titles  to  exchangeable  products  are  discounted 
and  by  whom  credits  are  granted. 

8th. — It  would  be  impossible  for  the  government  of 
the  richest  nation  to  supply  coined  money  sufficient  for 
the  whole  work  of  commerce.  A  much  less  sum  may 
always  be  available  in  ample  measure  for  prompt  re- 
demption. A  rich  nation  will  always  supply  itself  with 
all  the  coin  of  the  highest  standard  that  it  can  possibly 
use  in  sustiiining  its  instruments  of  credit. 

9th. — There  is  no  international  legal  tender,  therefore 
foreign  exchanges  ieire  now  adjusted  to  the  pound  ster- 
ling, which  is  the  name  or  title  given  to  one  hundred 
and  thirteen  grams  of  gold,  the  equivalent  coin  being 
named  sovereign. 

10th.— The  effort  of  the  advocates  of  the  free  coin- 
^e  of  silver,  or  of  the  issue  of  government  legal  ten- 


852  SILYEB  AND  GOLD. 

der  paper  and  other  devices  for  supplying  money,  may 
be  attributed  to  their  ignorance  of  the  function  of 
credit  and  of  the  necessity  for  an  established  unit  of 
value.  Their  efforts  are  usually  accompanied  by  bitter 
prejudice  against  banks  and  bankers.  .  The  invariable 
result  of  any  success  on  their  part  is  a  paralysis  of  in- 
dustry by  which  prices  are  forced  below  cost  and  the 
compulsory  idleness  of  large  numbers  of  workmen  en- 
sues. These  results,  long  before  predicted,  were  fully 
realized  in  the  purely  financial  panic  of  1898,  and  will 
be  brought  about  again  sooner  or  later  unless  the  delu- 
sion for  "  cheap  money  "  is  crushed  out.  Another  re- 
sult of  this  delusion  is  found  in  the  condition  of  the 
specific  states  from  which  these  raisrepresentatives  are 
sent  to  congress.  They  remain  relatively  poor  and  un- 
progressive  because  the  public  credit  of  the  state  is  dis- 
trusted as  well  as  the  private  credit  of  the  citizens. 


HOir.  OHABLES  F08TAV  i^ot 


CHAPTER  XVL 

BT  0HASLE8  FOSTER,  OF  OHIO,  EX-SEOBHT.iHY  OF  IMtf 

TBBA8UBT. 

I  DO  not  concede  that  there  is  any  serious  troublo 
with  our  carrency  as  it  stands  at  present,  every  dol- 
lar of  which  is  the  equal  of  every  other  dollar;  and  I 
see  no  great  difficulty  in  maintaining  this  conditioUf 
simply  at  the  cost  of  maintaining  a  sufficient  gold  re- 
serve. But,  in  my  opinion,  the  time  has  come  when 
legislation  upon  the  currency  question  should  be  had 
upon  broad  lines.  The  time  has  come  when  our  float' 
ing  debt  (I  mean  the  treasury  notes,  both  old  and  new) 
should  be  funded  and  paid,  and  that  all  of  the  papel 
currency  of  the  country  should  consist  of  national  bank 
notes. 

My  suggestion  is,  that  the  government  authorize  the 
issue  of  two  and  one-half  per  cent,  bonds,  in  amount 
sufficient  to  take  up  the  five  hundred  millions  of  new 
and  old  treasury  notes ;  that  these  bonds  be  available 
to  the  banks  upon  which  to  base  circulation ;  that  the 
banks  should  be  permitted  to  issue  circulation  up  to 
the  par  of  the  bonds,  and  in  amount  equal  to  their  cap- 
ital and  surplus,  and  that  only  a  small  tax  should  be 
placed  upon  the  banks  to  pay  the  government  for  its 
expenses  for  printing  the  notes,  and  its  oversight  of 
them. 

To  give  the  elasticity  that  is  so  much  desired,  I  think 
|(i  would  be  well  to  authorize  all  clearing-houses  to  it* 


354  8ILVEE  AND  OOLI>. 

sue  clearing-house  certificates,  in  emergencies,  at  thi 
discretion  of  tlie  clearing-house  committee,  upon  the 
pledge  of  unquestioned  collateral.  I  would  also  sug- 
gest that  the  comptroller,  with  the  approval  of  the  Secre- 
tary of  the  Treasury,  be  empowered,  when  an  emei'gency 
arises,  to  issue  to  such  banks  as  apply,  what  may  b^ 
called  ejnergency  circulation,  to  a  limited  extent  of  their 
capital  and  surplus  (say  twenty-five  per  cent ),  upon 
such  pledge  of  collateral  as  shall  be  satisfactory  to  him. 

A  tax  of  1  to  3  per  cent,  might  be  charged  upon 
such  notes,  to  create  a  fund  for  the  redemption  of  the 
emergency  notes  of  failed  banks.  No  reserve  to  be 
required  for  such  emergency  notes.  The  good  assets  so 
named,  to  be  lield  as  security  for  the  redemption  of  cer- 
tificates so  issued.  If  it  should  be  found  practicable^ 
which  I  doubt,  for  a  clearing-house  district  to  be  so 
formed  as  will  enable  it,  within  its  own  jurisdiction,  to 
engnge  in  the  business  of  authorizing  the  issue  of  cer- 
tificates, I  can  see  no  objection  to  giving  such  authority. 
When  conditions  change,  the  circulating  notes  are  to 
be  paid  off  first,  and,  secondly,  the  clearing-house  cer- 
tificates. 

The  notes  should  be  a  first  lien  upon  all  the  assets 
of  the  bank.  To  avoid  any  question  as  to  the  ultimate 
payment  of  any  circulating  note,  the  government  itself 
should  guarantee  their  redemption.  There  can  be  but 
little  risk  to  the  government  in  any  event,  and  it  is  bet- 
ter, even  if  the  government  should  lose  something  by 
this  guarantee,  than  that  there  should  be  any  question 
as  to  the  soundness  of  the  notes  themselves.  These 
emergency  notes  should  have  some  distinguishing  mark 
printed  upon  them,  to  distinguish  them  from  the  regular 
i^ues. 


HON.  CHABLBS  FOSTBB.  856 

• 

If  this  plan  of  finance  should  be  adopted  and  con* 
sumuiated,  the  total  amount  of  United  States  bonds 
outstanding  would  be  about  11,800,000,000.  To  cover 
the  bank  note  circulation  now  outstanding  and  make 
good  the  withdrawal  of  $500,000,000  of  treasury  notes 
by  an  equal  increase  of  bank  notes,  would  require 
•700,000,000,  leaving  $600,00a,000  for  further  use  as  a 
basis  for  circulation.  The  increase  of  bank  notes  should 
at  all  times  practically  keep  pace  with  the  retirement 
of  the  treasury  notes. 

The  9600,000,000  of  bonds  yet  unused  wUI,  for  the 
time  being,  furnish  a  sufficient  basis  for  the  farther  is- 
sue of  notes,  so  that  the  question  of  furnishing  a  sub- 
stitute for  bonds  as  security  for  bank  notes  is  not  at 
present  important.  When  the  time  comes  that  bopds 
are  no  longer  available  for  this  purpose,  there  can  be  no 
doubt  that  a  practical  substitute  can  be  found. 

I  have  suggested  that  the  banks  be  authorized  to  is- 
sue notes  equal  to  their  capital  and  surplus.  This  sug- 
gestion is  prompted  by  the  fact  that  the  total  surplus 
exceeds  the  capital,  and  in  some  banks  the  surplus  ex- 
ceeds many  times  their  capital.  The  banks  should  be 
required  to  keep  at  least  one -third  of  their  resei*ve  in 
gold.  If  this  plan  be  adopted,  the  volume  of  emergency 
notes  and  clearing-house  certificates  could  be  availed  of 
to  so  great  an  extent  as  to  allay  the  fears  of  the  most 
timid  as  to  any  scarcity  of  money  or  even  of  credits 

A  gentleman  holding  high  official  position  in  the 
present  administration,  has  said  that  the  government 
has  no  more  concern  over  the  deposits  in  national 
banks  than  it  has  over  wheat  stored  in  a  public  elevator. 
If  this  be  true,  as  the  bank  notes  are  amply  secured, 
Whv  does  the  government  exercise  supervision  over  tb^ 


856  StLYBB  AND  GOLD. 

banks  1  What  is  the  object  of  this  supervision,  if  it  is 
not  to  use  the  utmost  efforts  of  the  government  to  se- 
cure sound  banking,  to  keep  the  banks  within  safe, 
prescribed  lines  ?  If  this  is  not  protecting  depositors,  I 
wholly  misunderstand  its  object. 

These  banks  having  been  authorized  by  congress,  it  is 
the  plain  duty  of  the  government  to  use  its  best  efforts 
to  protect  the  public  in  all  their  dealings  with  institu- 
tions so  authorized. 

If  a  system  of  currency  legislation  such  as  is  here 
briefly  and  imperfectly  outlined,  were  adopted,  then 
the  paper  currency  of  the  country  would  be  only  the 
notes  of  the  national  banks.  There  would  then  be  no 
necessity  for  the  government's  maintaining  a  gold  re- 
serve of  any  amount.  This  being  accomplished,  it 
seems  to  me  that  the  government  might  then  undertake 
the  purchase  of  all  of  the  American  product  of  silver, 
and  coin  it,  or  permit  the  holders  free  coinage  of  the 
American  product,  the  seigniorage  to  go  to  the  govern- 
ment. 

As  it  will  take,  according  to  well-authenticated 
figures  $800,000,000  to  transact  the  retail  business  of 
the  country,  the  present  stock  of  silver  can  be  utilized 
for  this  purpose.  If  all  this  business  is  done  with  sil- 
ver, $300,000,000  in  addition  will  be  required.  It  is 
sought  to  do  this  by  limiting  the  issue  of  bank  notes  te 
denominations  not  less  than  $10  or  $20. 

The  treasury  would  be  relieved  from  the  task  of 
maintaiang  a  gold  reserve.  Silver  being  a  legal  tender, 
the  banks  could  not  be  denuded  of  their  gold.  When 
gold  was  wanted  for  export,  the  exporter  would  then 
get  what  he  wanted  by  negotiating  with  those  who 
bad  it    In  other  words,  our  condition  would  not  b9 


HON.  GHABLE8  FOSTER.  86T 

that  of  inviting  gold  exports,  as  is  the  case  at  pres- 
ent. 

It  has  been  suggested  that  hereafter  no  bank  notes  or 
circulating  medium  in  the  shape  of  paper,  should  be  of 
less  denomination  than  ten  dollai*8.  The  purpose  of 
this  is  to  compel  the  circulation  of  silver  for  all  of  the 
small  transactions  of  the  country,  which  it  is  estimated 
would  require  $800,000,000.  I  doubt  very  much 
whether  the  requirement  would  be  so  great,  but  that  is 
not  a  matter  of  importance.  I  no  not  see  any  special 
benefit  in  compelling  the  circulation  of  silver  dollars. 
I  would  agree  with  the  plan  so  far  as  to  say  that  no 
bank  note  should  be  issued  of  a  denomination  less  than 
ten  or  twenty  dollars.  But  I  can  see  no  reason  why 
this  inhibition  should  apply  to  silver  certificates.  The 
certificates  simply  represent  the  silver  in  the  vaults  of 
the  treasury.  It  is  much  preferable,  in  the  daily 
transaction  of  business,  to  handle  the  notes,  than  it  is 
to  handle  the  silver.  And  then,  again,  there  would  be 
no  abrasion  or  loss  of  silver.  There  are  seasons  of  the 
year  when  the  West  and  South  need  small  bills  to  move 
the  crops.  If  that  suggestion  prevails,  then  a  large 
additional  cost  is  imposed  upon  the  public  for  trans- 
porting and  handling  the  silver;  and  it  must  be  re- 
membered that  when  this  currency  has  fulfilled  its 
mission,  it  is  returned  again.  The  end  is  practically  the 
same,  viz :  the  compulsion  of  the  use  of  silver  for  all 
the  small  transactions  of  the  country. 

I  would  also  modify  the  sub-treasury  act  so  as  to 
permit  the  Secretary  of  the  Treasury  to  deposit  the 
moneys  of  the  government  with  the  banks,  taking  gov- 
emment  bonds  as  security,  as  is  done  now  with  re- 
ceipts  of  internal  revenue  in  many  places.    A  small 


868  SILYSB  AND  GOLD. 

rate  of  interest  might  be  charged  the  banks.  If  this 
were  done,  the  money  of  the  government  would  be  in 
the  hands  of  the  people  for  daily  use,  and  would  add  to 
the  present  volume  something  like  $160,000,000.  If^ 
in  addition  to  what  is  here  suggested,  a  national  clear- 
ing-house would  be  established,  so  that  gold  need  not 
be  constantly  carried  back  and  forth  across  the  Atlan- 
tic, an  enormous  improvement  in  financial  and  cur- 
Mncy  conditions  will  have  been  achieved. 


gSMATOK  FB£D«  T.  DUBOIS.  6&9 


CHAPTER  XVn. 

Bl   0fiNATOB  FBBD.  T.  DUBOIS,  OF  IDAHO. 

It  is  rery  evident  to  the  most  easaal  and  indifferent 
obseryer  that  the  cause  of  silver  is  gaining  ground 
every  hoar.  This  is  apparent  iu  Germany,  England 
and  all  the  gold-standard  countries  of  Europe,  as  well 
as  in  the  United  States.  The  most  rapid  progress  and 
the  crystalization  of  sentiment  is  more  marked  in  the 
United  States,  to  be  sure.  The  reasons  for  the  change 
of  sentiment  are  easily  understood.  Distress  and  hard 
times  are  general  throughout  the  world.  There  is  a 
prevailing  opinion  among  producers  and  wage  earners 
that  the  era  of  falling  prices  and  consequent  depres- 
sion in  all  lines  of  trade  has  been  brought  about  by  the 
adoption  of  the  gold  standard  by  the  leading  nations  of 
the  world.  Nothing  is  of  stable  value  now  save  good 
gold  mines  and  gold  money.  There  are  not  many  of 
the  former,  and  the  owners  of  gold  money  as  a  rule  do 
not  live  in  the  United  States. 

The  great  majority  of  the  people  of  this  country 
understand,  I  think,  that  with  gold  as  the  sole  standard 
of  money  that  metal  is  appreciated  and  all  things 
which  it  measures  in  value  are  depreciated.  It  is  boy- 
isli  and  unworthy  of  men  who  undertake  to  direct 
public  sentiment  to  say  that  silver  has  not  been  demon- 
etized.  To  say  that  silver  is  still  in  use  and  in  large 
quantities  in  the  United  States  and  that  it  is  maintained 
on  a  parity  with  gold  is  a  begging  of  the  entire  mone- 


860  aiLVEB  AND  GOIA 

tary  question  which  is  entirely  unworthy  of  sonib  dia* 
tinguished  gentlemen  who  have  lately  expressed  them* 
selves.  There  must  be  basic  money.  On  this  other 
moneys  rest.  There  must  be  a  money  of  ultimate  re- 
demption in  order  to  insure  absolutely  safe  currency. 
It  is  a  serious  question  whether  there  is  or  can  be 
enough  of  both  gold  and  silver  to  supply  this  basic 
money.  When  both  were  used,  prior  to  1878,  they 
seemed  to  answer  the  purpose  and  remained  at  a  ratio 
of  about  15|  ounces  of  silver  to  1  of  gold.  The 
prices  of  labor,  of  wheat,  cotton,  corn  and  other  prod- 
ucts were  maintained. 

When  silver  (which  comprised  one-half  of  the  basic 
money)  was  demonetized,  when  it  was  no  longer  recog- 
nized as  the  equal  of  gold  at  the  mints,  but  was  made 
a  commodity  the  same  as  coffee,  it  fell  in  value  as  com- 
pared with  gold,  until  now  it  is  as  about  thirty-two 
ounces  of  silver  to  one  ounce  of  gold.  The  significant 
fact,  however,  that  wheat  and  corn  and  cotton  and  the 
value  of  all  other  products,  as  well  as  the  price  of 
labor,  has  fallen  with  silver  is  what  creates  the  great 
demand  for  the  restoration  of  silver  as  basic  money. 

I  have  the  greatest  respect  for  many  of  the  able  sil- 
ver advocates  in  the  United  States  who  do  not  see  their 
way  clear  to  unlimited  coinage  by  our  country  acting 
alone.  I  myself  cannot  see  how  we  are  to  secure  bimet- 
allism unless  the  United  States  takes  the  initiative. 
England  is  a  creditor  nation.  The  gold  standard  makes 
money  scarce  and  dear.  This  is  to  the  advantage  of 
England  and  she  will  :*7ct  consent  to  the  addition  of 
silver  as  redemption  money  unless  she  is  compelled  to. 
I  have  no  hopes  of  any  international  agreement  until 
after  tliis  government  adopts  free  coinage.    England 


JXiiEU  H.    ECKEI^, 


8ENAT0B  FBED.  T.  DUBOIS.  868 

auu  the  other  great  nations  of  Europe  will  then  be 
compelled  to  join  us  or  lose  their  commercial  suprem- 
acy. 

The  minute  the  United  States  adopts  free  coinage  at 
the  ratio  16 J  or  16  to  1  the  price  of  silver  will  be  regu- 
lated throughout  the  world.  No  one  who  has  given 
the  subject  serious  thought  or  who  has  any  regard  for 
his  reputation  as  a  student  of  finance  attempts  to  argue 
any  longer  that  the  restoration  of  silver  by  the  United 
States  acting  independently  would  cause  the  country 
to  be  flooded  with  silver  from  foreign  nations.  This 
country  could  not  be  a  "  dumping  ground  "  for  silver  for 
the  simple  reason  that  there  is  no  nation  which  does 
not  absolutely  need  all  the  silver  which  it  has.  There 
is  no  loose  silver  anywhere  to  come  here.  There  will 
be  no  object  in  foreign  countries  sending  silver  here, 
even  if  they  had  it  to  spare,  because  it  would  be  worth 
as  much  in  each  of  the  foreign  countries  as  here  and 
they  would  lose  by  sending  it  here  what  the  cost  of 
transportation  would  amount  to. 

Some  claim  that  with  free  coinage  all  the  gold  will 
leave  this  country.  What  if  it  does  ?  Where  will  it 
go  to?  Admit  for  the  sake  of  argument  that  it  will  go 
to  England.  The  volume  of  the  money  in  England 
will  increase  to  that  extent,  with  the  result  that  the 
price  of  our  products  which  we  sell  in  England  will  be 
enhanced  and  England  will  find  it  impossible  to  retain 
the  gold. 

It  has  been  demonstrated  clearly  that  gold  cannot  be 
retained  in  this  country  under  the  present  condition 
of  affairs.  The  government  is  absolutely  at  the  mercy 
of  any  syndicate  of  rich  bankers  who  desire  to  take  it 
out  of  the  treasury.  All  they  have  to  do  is  to  present 
81 


864  SILVER  AND  GOLD. 

the  various  forms  of  currency  for  redemption  and  our 
gold  reserve  of  $100,000,000  melts  away.  The  exper- 
ience in  this  direction  has  been  so  recent  that  every 
one  can  recall  it.  The  government  has  issued  over 
$100,000,000  of  new  bonds  bearing  interest  in  its  des- 
perate effort  to  maintain  the  gold  reserve  of  $100,000,- 
000.  It  might  continue  this  operation  and  in  that  way 
supply  the  gold  deficit,  which  is  liable  to  occur  at  any 
moment,  but  these  bonds  with  interest  must  be  paid  at 
some  time.  This  process  of  borrowing  gold  with  in- 
terest-bearing obligations  cannot  continue  indefinitely. 

The  silver  men  in  the  country  are  very  much  in 
earnest.  They  number  a  great  majority  of  the  people 
and  will,  I  think,  find  a  way  to  make  their  demands 
effective. 

It  looks  to  me  as  though  both  of  the  great  national 
parties  would  declare  for  silver  in  1896.  In  my  judg- 
ment no  party  can  win  which  endeavors  to  keep  our 
government  fastened  to  the  single  gold  standard.  If 
both  of  the  leading  national  parties  should  be  con- 
trolled by  the  gold  standard  advocates,  neither  of  them 
could  elect  their  candidate.  An  advocate  of  silver 
would  then  be  nominated  either  in  the  electoral  college 
•r  by  a  separate  national  convention  and  elected. 


MUBAT  HAL8T1&AD.  865 


CHAPTER  XVIIL 

BT  MT7BAT  HALSTBAD,  OF  BBOOKLTBT. 

Hoir  is  the  silver  and  gold  question  to  be  nettled  ? 
First,  we  will  state  what  will  not  occur.  Our  mints 
will  not  be  made  free  markets  for  silver  until  a  great 
deal  happens  that  is  not  popularly  contemplated.  No 
free  silver  bill  will  become  a  law ;  at  least  until  aftei 
all  the  present  champions  of  that  radical  measure  have 
abandoned  its  advocacy. 

Nothing  important  will  transpire  in  an  international 
conference.  There  will  be  no  congress  of  nations  that 
will  proclaim  unlimited  coinage  of  silver  into  lawful 
money  without  limit  until  the  battle  of  the  standards 
is  practically  over,  settled  by  commerce,  not  confer- 
ences. 

Let  us  put  down  a  few  points  to  mark  the  way  to  a 
clear  comprehension : 

First. — No  one  has  ever  conspired  against  silver  in 
this  country.  The  original  "  Criminal  of  the  Century  " 
was  Thomas  Jefferson,  who,  through  James  Madison, 
in  1806,  ordered  the  Director  of  the  Mint  to  cease  coin- 
ing  silver  dollars,  an  order  that  stood  for  a  generation. 

Second. — This  was  not  because  silver  was  improper 
or  unsuitable,  but  for  the  reason  the  silver  dollar  was 
more  valuable  under  the  ratio  than  the  gold  dollar,  and 
was  exported  accordingly. 

Third. — Thomas  Benton  had  the  same  trouble  that 
Thomas  Jefferson  encountered  with  silver  dollars.  The 


366  SXLYEB  AKD  GOLD. 

coinage  of  silyer  dollars  was  not  restrained  because  the 
dollars  were  unpopular  or  useless,  but  were  too  good 
to  circulate.  This  fact  cuts  into  the  extremists  on 
both  sides,  and  will  stay  and  bear  an  edge. 

Fourth. — The  silver  dollar  was  still  at  a  premium  in 
1873,  when  it  was  dropped  by  act  of  congress  from 
the  list  of  coins.  The  act  of  congress  amounted  to 
the  same  thing  that  the  act  of  President  Jefferson  did, 
though  an  act  of  omission  not  commission. 

Fifth. — Why,  then,  is  not  Jefferson  the  centennial 
criminal  ?  Why  did  not  his  crime  produce  all  the  aW' 
ful  consequences  we  hear  so  much  about  out  West  and 
down  South  ? 

Sixth. — The  act  omitting  tlie  silver  dollar  coinage 
was  not  passed  secretly.  The  facts  were  all  fairly 
stilted  on  the  floor  of  congress,  but  years  passed  before 
tlie  people  knew  that  anything  had  happened.  They 
did  not  feel  interested  and  actually  their  concern  was 
slight. 

Seventh. — The  fall  of  silver  was  not  expected,  but 
Germany  adopted  the  gold  standard,  and  the  various 
modern  improvements  in  mining  were  rapidly  increas- 
ing the  product  of  silver.  We  had  not  done  anything 
that  influenced  the  market. 

Eighth. — We  were  approaching  the  resumption  of 
specie  payments,  and  the  popular  instinct  that  it  would 
be  well  to  be  thoroughly  equipped  with  both  money 
metals  was  correct.  Specie  meant  both  gold  and  silver 
coin,  and  we  could  not  resume  with  what  we  had  not. 

Ninth. — There  had  been  an  immense  increase  of  in- 
debtedness— issues  of  securities — ^in  the  paper  money 
period,  and  of  course  there  should  not  be  removed  one 
of  the  metals  constituting  ^^  coin  "  for  the  discharge  of 


MUBAT  HAI^TEAD.  867 

obligations  when  we  attained  the  specie — that  is,  the 
gold  and  silyer  basis. 

Tenth. — Upon  this  argument  and  the  belief  that  the 
purchase  of  silver  by  the  government  would  advance 
its  price,  the  policy  of  coining  two  millions  a  month,  at 
least,  of  silver  dollars,  was  established,  and  its  dises- 
tablishment did  not  follow  until  we  had  broken  all 
records  in  coining  silver,  heaping  it  up  by  the  hundred 
millions,  and  had  done  it  all  the  while  on  a  falling 
market. 

Eleventh. — The  diflBculty  of  the  decline  of  silver 
while  the  government  was  taking  the  bulk  of  the  prod- 
uct of  the  mines  had  not  been  anticipated.  Nobody 
*'  demonetized  "  silver,  or  wanted  to  do  so,  because  he 
thought  it  was  down — or  would  be  put  down.  Our 
experiences  had  been  from  the  first  that  we  under- 
valued silver  in  comparison  with  Europe — and  put  so 
much  of  it  in  our  coins  that  they  were  worth  more 
than  their  faces  called  for. 

These  are  the  plain  truths  of  the  silver  question. 
They  are  written  in  the  laws  of  the  land,  and  the  his- 
tory that  gives  the  reasons  for  the  laws.  We  have 
stated  the  facts  without  fanciful  decoration.  There 
was  no  secret,  no  conspiracy,  no  crime,  no  wrong  done 
in  the  silver  matter.  We  reversed  the  Jeffersonian 
policy  by  coining  an  amount  of  silver  beyond  all  ex- 
ample, and  that  is  what  is  called  demonetization. 

If  there  was  any  great  impolicy  in  our  proceedings, 
it  was  in  resumption — ^in  not  going  on  with  paper — in 
not  combining  the  greenbacks  and  the  graybacks,  as 
"the  Blue  and  Gray"  were  united.  We  might  as 
well,  perhaps,  have  adopted  the  Confederate  currency 
at  first,  as  the  Confederate  tariff  at  last.    But  it  was 


868  SILVER  AND  GOLD. 

just  %s  natural  to  us,  after  the  military  overthrow  of 
the  Southern  Confederacy,  to  press  on  to  fix  high 
credit  for  the  republic  among  the  nations,  by  paying 
the  national  debt  largely  and  making  all  our  money  as 
good  as  gold — as  it  was  for  Germany  to  adopt  the  gold 
standard  after  defeating  France,  and  getting  for  in- 
demnity $1,000,000,000. 

Perhaps  it  would  have  been  better  to  have  printed 
enough  greenbacks  to  pay  the  national  debt,  and  to 
have  rushed  along  the  lines  of  Populistic  endeavor — 
and  thus  to  have  tried  the  cheap  money  patent  medi- 
cine to  the  full — but  that  was  not  what  the  statesmen 
who  had  charge  of  the  country  after  the  war  thought 
about  it.  They  held  that  the  Southern  Confederacy 
had  experimented  sufficiently  with  unlimited  paper 
money.  They  believed  the  southern  soldiers  were 
brave — the  southern  generals  able — for,  indeed,  there 
were  many  things  unaccountable  on  any  other  pre 
sumption — but  they  did  not  think  well  of  the  southern 
politicians  as  they  appeared  in  the  origin  and  conduct 
of  the  war. 

If  we  were  going  into  the  cheap  money  business  at 
all,  we  should  have  done  it  right  away  after  the  war 
and  to  the  full  extent.  The  end,  of  course,  would 
have  been  the  annihilation  of  credit — the  impoverish- 
ment of  the  many — the  enrichment  of  the  few.  That's 
the  way  with  paper  money  inflation. 

The  silver  controversy  is  unworthy  the  intelligence 
and  the  integrity  of  the  American  people.  This  free 
coinage  of  silver  policy  is  a  poor,  shabby  half-way  prop- 
osition. It  is  a  50  cent  repudiating  dodge,  or  it  is 
sheer  craziness.  If  it  does  not  mean  to  settle  at  50 
cents  on  the  dollar,  what  is  it  fit  for? 


MUBAT  HALSTEAD.  869 

It  is  said  that  the  demonetization  of  silver  has 
caused  the  price  of  farm  products  to  fall.  Well,  wheat 
and  cotton  have  been  going  up  and  down  lately  and 
silver  has  not  sympathized  in  the  least  with  their 
movements,  and  this  is  a  demonstration  of  the  falsity 
of  the  assumption  that  silver  pulls  our  farm  products 
up  and  down. 

It  is  well  to  have  plenty  of  money,  the  people  say, 
and  so  it  is,  truly  ;  but  as  for  silver,  we  have  $510,000,- 
000  in  the  treasury,  and  if  the  people  want  a  few  hun- 
dreds of  millions  of  silver  dollars  to  jingle  in  their 
pockets  there  they  are — ^five  silver  dollars  for  each 
man,  woman  and  child  in  the  United  States  not  in  cir- 
culation. Why  do  not  the  people  get  them  out  of  the 
treasury  and  carry  them  around?  Why  should  we 
coin  any  more  of  them?  More  than  five  hundred  mil- 
lions  of  silver  dollars  coined  and  in  pigs  in  the  vaults 
and  staying  there  from  month  to  month  and  year  to 
year,  ought  to  be  sufficient  for  tbe  most  imaginative 
silver  crank,  but  they  seem  only  to  cause  the  inflamma- 
tion of  folly. 

The  situation  is  a  simple  one,  and  the  best  thing 
that  can  be  done  with  it  is  to  let  it  alone.  The  course 
of  events  will  take  care  of  it.  The  Director  of  the 
Mint  reports  the  output  of  gold  in  1894  to  be  $172,- 
000,000 ;  in  1890,  the  output  was  $118,000,000 ;  '91, 
$180,650,000;  '92,  $146,297,000;  '98,  $157,228,000, 
and  in  '94,  a  gain  of  $15,000,000  over  '98— the  great- 
est  production  of  gold  ever  known  in  the  world,  and 
the  evidence  of  continued  increase  goes  on.  The 
Director  of  the  Mint,  a  constant  student  of  this  mat- 
ter, says  the  gold  product  will  soon  reach  $225,000,000 


870  SILVER  AND  GOLD. 

a  year — more  than  $18,000,000  a  month — over  94,000^ 
000  a  week. 

There  are  enormous  banking  reserves  of  gold  in 
Europe,  and  there  is  a  prodigious  sum  unaccounted 
for  by  the  money  in  circulation  and  by  the  metal  con- 
sumed in  the  arts.  The  people  have  been  hoarding  it. 
Gold  has  gone  into  the  stockings  in  Europe  and  Amer- 
ica, as  silver  slumps  in  Asia.  There  is  no  lack  of  it^ 
but  there  is  no  harm  in  plenty  of  silver  also. 

That  the  increased  production  of  gold  will  be  influ 
ential  in  human  affairs  is  unquestionable.  It  will  favo** 
particularly  the  prosperity  of  Labor.  The  "  World " 
has  a  cablegram  from  Europe  that  the  Rothschilds  are 
in  favor  of  international  bimetallism,  and  the  same 
journal  reports  Senator  Jones  of  Nevada  as  saying : 

"  The  greatest  bankers  in  Europe  are  in  favor  of  .bi- 
metallism because  they  have  watched  closely  for  a 
number  of  years  the  increase  in  gold  production,  which 
has  been  going  on  steadily  for  a  decade,  and  have  come 
to  the  conclusion  that  a  tremendous  fall  in  the  price 
of  gold,  as  measured  in  the  general  level  of  prices, 
must  inevitably  take  place.  This  fall  they  have  fig- 
ured as  beginning  probably  within  three  years  and  ex- 
tending hidefinitely." 

This  is  going  too  far,  but  it  is  in  the  nature  of  sug- 
gestions that  are  of  importance.  The  addition  of  at 
least  $200,000,000  of  gold  each  year  will  cause  a  gold 
inflation,  but  tlie  bankers  ai*e  not  prepared  to  fall  back 
on  silver  as  the  more  steady  metal.  That  shift  cannot 
be  turned,  but  it  is  true  that  the  Rothschilds  have  been 
interesting  themselves  in  the  African  gold  mines,  and 
willing  to  favor  an  increased  use  of  silver,  but  outside 
of  this  country  in  the  gold  countries  no  one  advocates 


HUBAT  HALSTEAD. 


871 


what  we  call  free  coinage.  Such  madness  of  misinfor- 
mation is  not  conceived  elsewhere.  With  the  con- 
sumption of  silver  limited  in  coinage  and  the  new  sup- 
ply of  gold  pouring  in  and  free  at  all  the  mints,  there 
will  be  an  approximation  of  the  two  metals  in  market 
prices  at  the  old  ratios,  and  it  will  come  pretty  fast 
when  the  movement  is  fairly  under  way.  When  this 
happens  there  may  be  business  in  conferences,  but  not 
until  then. 


872  SILYEK  AND  GOLD. 


CHAPTER  XIX. 

BY  BX-GOYEBNOB  HOBAGE  BOIES,   OF  IOWA. 

The  question  to  be  answered,  in  my  mind  takes  the 
following  form  :  "  If  the  choice  in  fact  lies  between  the 
maintenance  of  our  present  money  standard  or  its 
abandonment  for  a  standard  of  silver  only,  would  you 
recommend  the  change,  or  deem  it  wise  to  change  our 
monetary  system  to  the  silver  basis  ?  " 

Before  answering  this  question,  I  desire  to  say :  Our 
present  money  standard  is  purely  a  gold  standard  in 
which  the  unit  of  value,  (one  dollar)  is  fixed  at  twenty- 
five  and  tjight-tenths  grains  of  gold.  That  thic  was 
substantially  the  standard  of  the  gold  dollar  before  as 
well  as  since  the  demonetization  of  silver  in  1873. 
That  the  demonetization  of  silver  reduced  by  nearly  if 
not  quite  one-half  the  primary  money  of  the  country, 
and  in  obedience  to  the  inexorable  law  of  supply  and 
demand  necessarily  enhanced  the  value  of  the  remain* 
ing  one-half  which  was  not  demonetized. 

That  the  process  of  increasing  the  value  of  this  half 
was  not  an  instantaneous  process  but  a  continuous  one, 
that  has  been  constantly  going  on  since  the  act  of  de- 
monetization, and  must  continue  to  go  on  in  the  future 
so  long  as  the  necessities  of  governments  or  the  greed 
of  men  induce  them  to  hoard  gold,  and  thereby  dimin- 
ish the  volume  of  primary  money  in  circulation,  and 
this  in  an  accelerated  degree,  if  for  any  reason  the 
world's  annual  production  of  this  one  metal  is  hereafter 


I 


EX-GOVEBKOB  HOBAGE  BOIES.  873 

diminished.  That  the  experience  of  our  own  govern- 
ment in  the  recent  past  demonstrates  that  under  our 
present  system,  this  nation,  one  of  the  strongest  and 
wealthiest  on  the  face  of  the  earth,  is  absolutely  at  the 
mercy  of  the  money  power  of  its  own  citizens,  a  limited 
class  of  whom  are  capable  of  draining  its  treasury  of 
the  last  dollar  of  primary  money  it  possesses,  or  send- 
ing it  into  the  markets  of  the  world  a  suppliant  at  the 
very  feet  of  foreign  money  kings,  to  exchange  its  credit 
for  gold  on  any  terms  these  gentlemen  see  fit  to  dic- 
tate. 

That  the  effect  of  enhancing  the  value  of  the  primary 
money  of  the  country  upon  the  debtor  class  is  even 
more  disastrous  because  it  increases  the  burden  of  their 
obligations  to  the  same  extent  that  the  value  of  the  one 
metal  that  constitutes  the  primary  money  of  the  coun- 
try is  enhanced,  and  to  the  same  degree  increases  thr 
wealth  of  the  creditor  class  of  this  and  other  countries 
who  hold  the  immense  aggregate  of  our  obligations  ta 
pay,  national,  state,  municipal,  corporate  and  individ- 
aal,  the  entire  weight  of  which  must  always  be  borne 
by  the  producing  classes. 

That  as  the  value  of  money  is  enhanced,  the  price  at 
least  of  the  products  of  labor  must  necessarily  diminish 
as  they  have  diminished  since  silver  was  demonetized, 
and  in  the  end  the  price  of  labor  must  inevitably  seek 
the  same  level  comparatively  that  products  produced 
by  it  sell  for  in  the  markets. 

The  choice,  therefore,  that  the  question  suggests  to 
my  understanding,  is  simply  a  choice  between  our  pres- 
ent gold  standard  to  remain  a  fixed  and  unalterable 
principle  in  our  currency  system  for  all  time  to  come, 
and  a  silver  basis  that  would  by  reason  of  a  cheaper 


874  SILVflB  AJSiD  GOLD. 

« 

unit  of  value,  exclude  gold  from  circulation  as  monej 
among  the  masses  of  our  people,  but  leave  it  equally 
with  silver  ;  legally  at  least,  a  part  of  our  money  of  re- 
demption. 

With  this  explanation,  I  unhesitatingly  answer  that 
I  would  exchange  our  present  money  standard  for  a 
itandard  of  silver  only,  if  this  is  necessary  to  secure 
the  use  of  both  gold  and  silver  as  le^al  money  of  re- 
lemption. 

I  have  reached  this  conclusion  because  I  am  now  con- 
rinced  the  contest  in  which  the  people  of  this  country 
tire  now  engaged  is  not  one  of  ratio  at  all,  but  one  that 
involves  the  vastly  more  important  question  of  whether 
we  are  to  reincorporate  into  our  financial  system  the 
principle  of  bimetallism  on  which  the  fathers  of  the  re- 
public anchored  it,  and  which  I  am  entirely  willing 
to  affirm  upon  my  own  personal  knowledge,  was  elim- 
inated from  it  without  any  general  understanding  by 
the  masses  of  what  was  being  done. 

I  want  it  understood,  however,  that  I  am  as  much 
opposed  to  silver  monometallism  as  I  am  to  gold  mono- 
metallism, and  when  the  country  reaches  the  question 
of  what  shall  constitute  an  honest  dollar  in  each  metal, 
if  it  does  in  my  lifetime,  whatever  influence  I  possess 
will  be  used  to  make  both  honest  dollars,  equally  just 
to  all  classes,  and  to  provide  safeguards  if  any  are 
found  necessary  to  maintain  the  parity  of  the  different 
coins. 


OOLONBI«  A»  K*  MCOLUSU  87o 


CHAPTER  XX. 

n   €OJj.  A.  E.  MCGLUBB,  EDITOB    OF   THB  PHILADEIi* 

PHIA  TIMES. 

1'hb  adoption  of  free  silver  coinage  in  this  country 
on  the  basis  of  16  to  1,  would  at  once  precipitate  silver 
monometallism  and  a  tempest  of  destruction  to  com- 
merce, industry  and  trade  would  inevitably  follow. 

Sucli  a  step  would  degrade  the  United  States  that 
has  maintained  its  credit  throughout  the  entire  world 
for  more  than  a  century,  to  the  pagan  nations  and 
semi  civilized  South  American  governments.  Both 
public  and  private  credit  would  either  be  destroyed  or 
greatly  impaired,  and  the  severest  blow  would  fall  on 
the  industrial  classes  of  the  country. 

The  adoption  of  the  silver  standard  in  this  country 
would  bring  back  upon  us  from  the  old  world  hundreds 
of  millions  of  securities  in  excess  of  the  entire  money 
of  the  country,  including  gold,  silver  and  paper.  Our 
securities  would  be  discredited,  and  we  would  be  com- 
pelled to  redeem  them ;  our  great  improvements,  largely 
maintained  by  foreign  capital,  would  be  summarily 
ended,  and  the  pall  of  death  would  fall  upon  American 
enterprise. 

International  bimetallism  is  not  possible  unless  on  the 
basis  of  the  intrinsic  value  of  gold  and  silver  coin,  and 
how  the  parity  of  the  two  metals  can  be  maintained 
when  silver  is  constantly  varying  in  value,  is  not  com- 
prehended.   The  adoption  of  bimetal  standard  of  16  to 


376 


8ILVEB  AND  GOLD. 


1  would  be  a  departure  from  the  fundamental  theory  of 
honest  money,  and  it  certainly  must  be  rejected  by  the 
leading  governments  of  Europe  for  the  reason  that  it 
would  at  once  double  the  value  of  the  money  of  the 
pagan  and  semi-civilized  countries  of  the  world  which 
have  the  silver  standard. 

The  only  safe  rule  for  the  United  States  to  adopt  is 
to  maintain  the  money  standard  that  is  accepted  by  all 
the  civilized  countries  of  the  world.  We  must  do  it 
not  only  because  it  is  right  and  honest  and  necessary  to 
the  maintenance  of  public  credit,  but  we  must  do  it  be- 
cause we  are  the  largest  borrowing  nation  of  the  world, 
and  have  developed  for  our  people  billions  of  wealth  by 
the  aid  given  us  from  foreign  capital. 


JIOBBIS  M.  ESTlfiB.  Zll 


CHAPTER  XXL 

BYStOltBlB  M.  ESTEE.  OF  GALIFOBNIA. 

The  modern  way  of  increasiog  the  interest  on  money 
is  to  increase  the  purchasing  power  of  the  principal 
sum,  without  changing  the  specified  rate  of  interest. 
For  many  years  England  has  done  this.  The  creditor 
classes  of  America  are  now  imitating  her  example.  This 
is  dishonest.  It  benefits  the  creditors,  but  ruins  the 
debtors. 

Nothing  can  be  truer  than  that  the  financial  re- 
sources of  this  country  are  attacked  when  we  attempt 
to  destroy  one  part  of  our  metallic  money,  for  by  this 
means  the  value  of  products  are  lowered,  the  amount 
of  our  debts  is  increased  (because  the  purchasing  power 
money  is  greater  as  the  amount  of  money  becomes  less) 
and  hard  times  ensue. 

Constitutional  law,  as  well  as  tins  customs  of  our 
country,  marks  out  a  financial  policy  which  makes 
necessary  the  full  and  free  coinage  of  gold  and  silver 
money.  In  this  connection  it  may  be  stated  as  a  gen- 
eral proposition,  there  are  but  two  international  money 
metals,  gold  and  silver.  Gold  being  the  rarest  and 
most  difficult  to  obtain,  is  the  most  valuable.  Silver 
has  always  been  used  as  money,  and  is  the  most  con* 
venient  for  small  transactions.  It  is  the  money  of  the 
people,  and  is  used  alike  by  the  beggar  and  the  prince. 
In  our  own  country,  thousands  of  transactions  are 
made  in  silver  where  one  is  made  in  gold.    East  of  the 


578  SILYEB  AND  QK>L1>. 

Missouri  river  there  is  practically  no  gold  in  use.     Sll* 
yer,  coin  and  paper  are  the  only  moneys  in  circulation. 

The  coin  value  of  silver  in  the  United  States  com- 
pared with  the  coin  value  of  gold  is  as  sixteen  to  one  ; 
that  isy  the  coin  value  of  sixteen  ounces  of  silver,  900 
fine,  is  equal  to  one  ouuce  of  gold. 

The  Constitution  of  the  United  States  provides,  that : 

'*  The  congress  shall  have  power  *  *  *  to  coin 
money  and  regulate  the  value  thereof;  "  and  further — 
"that  no  State  ♦  ♦  ♦  shall  make  anything  but 
gold  and  silver  a  tender  in  payment  of  debts."  (Sec- 
tions 8  and  10,  Article  1,  Constitution.) 

It  is  constitutional  law,  that  no  State  can  make  any- 
thing but  gold  and  silver  coin  a  tender  in  payment  of 
debts.  Under  this  plain  constitutional  provision,  a 
State  can  make  both  gold  and  silver  a  legal  tender. 
But  it  cannot  make  one  a  legal  tender  and  prohibit  the 
use  of  the  other.  Both  metals  were  selected  by  the 
builders  of  our  government  as  the  necessary  money 
metals  of  our  country. 

Congress  has  no  powers  except  such  as  are  conferred 
upon  it.  The  States  retain  all  the  powers  not  expressly 
taken  from  them.  The  general  government  coins 
money,  and  it  coins  the  money  that  the  Constitution 
prescribes,  but  the  States  are  authorized  to  make  gold 
and  silver  the  only  legal  tender  in  payment  of  debts. 
In  a  word,  the  States  may  indicate  the  purposes  for 
which  the  money  so  coined  by  congress  can  be  used ; 
but  congress  cannot,  by  refusing  to  coin  gold  and  sil- 
ver, prevent  the  States  from  establishing  a  legal  tender 
which  the  Constitution  directs. 

When  congress  is  given  power  to  coin  money,  it 
m^ns  only  those  kinds  of  money  which  the  same  in- 


WILLIAM  A.    PEFFEE, 


MOBBIS  M.   ESTEE.  881 

Btrument  says  shall  be  a  legal  tender  in  payment  of 
debts.  This  clause  of  the  Constitution  clearly  points 
out  to  the  States  the  duty  which  they  have  to  perform. 
The  Supreme  Court  has  decided  that  congress  has  the 
power  to  make  paper  money  a  legal  tender.  The 
States  cannot  do  this.  Congress  has  no  power  to  de< 
monetize  any  money  which  the  States  may  declare  a 
legal  tender;  nor  is  there  anything  in  the  Constitution 
which  directly  or  indirectly  gives  to  congress  the  authority 
to  demonetize  any  constitutional  coin.  It  may  coin  money ; 
it  may  coin  gold  and  silver,  but  nowhere  is  congress 
given  the  authority  to  destroy  gold  or  silver  as  money. 

As  a  question  of  national  policy,  there  are  many  rea 
sons  why  this  should  not  be  done.  The  United  States 
produces  more  gold  and  silver  than  any  other  country, 
and  the  largest  possible  use  of  both  metals  encourages 
production  and  adds  to  the  stable  money  power  of  the 
people. 

In  1893,  it  is  claimed,  the  world  produced  in  gold  and 
silver  about  $363,892,800,  and  the  same  year  the  United 
States  produced  f  113,531,000,  or  about  one-third  of  the 
total  product.  During  the  first  ten  months  of  the  year 
1894,  there  was  exported  from  the  United  States,  in  ex- 
cess of  our  imports  of  gold,  more  than  seventy-three 
millions  of  dollars.  This  was  necessary  to  sustain  our 
balances  of  trade  and  pay  our  indebtedness  to  foreign 
countries.  Hitherto,  the  policy  of  our  government  has 
been  to  increase  the  exports  of  products,  and  decrease 
the  exports  of  gold  so  that  our  trade  balances  would  be 
sustained  without  the  use  of  money,  but  the  change  in 
our  revenue  laws,  and  the  admission  into  our  country 
of  free  and  cheap  raw  material  and  of  more  foreign 
manufactured  articles;  has  disturbed  the  courses  of 
82 


882  SILVEB  AND  GOLD. 

trade  and  thus  caused  a  marked  change  in  the  amount 
of  our  exports  and  imports.  We  are  now  compelled  to 
send  out  of  the  country  more  money  to  meet  the  de- 
mands which  these  now  conditions  impose  upon  us,  and 
should  we  continue  to  export  the  same  proportionate 
amount  of  gold  for  the  next  five  years  as  during  the 
last  ten  months,  there  will  be  very  little,  if  any,  gold 
left  in  the  country,  because  a  large  part  of  the  gold  in 
the  United  States  is  not  obtainable  either  for  exporta- 
tion or  business  purposes.  The  recent  large  shipment 
of  American  gold  to  Europe  has  surprised  the  gold 
people.  It  had  been  claimed  that,  when  silver  money 
and  silver  certificates  were  out  of  the  way,  gold  would 
be  abundant.  But  gold  has  not  been  abundant,  nor 
has  it  remained  at  home,  nor  have  our  foreign  and  do- 
mestic markets  improved.  It  matters  not  whether 
gold  goes  abroad  to  pay  our  trade  balances,  or  is  sent 
abroad  for  sale  as  a  speculation,  the  result  is  the  same — 
our  favorite  money  is  going  away  from  us,  and  it  leaves 
only  paper  money  to  do  business  with  here.  In  a  word, 
we  have  assisted  England  and  Germany  in  making 
gold  so  valuable  to  them  that  it  has  become  useless  to 
us,  for  we  cannot  keep  it  at  home.  Silver  has  not 
driven  it  away.  Free  coinage  is  not  the  reason  for  its 
going,  as  we  have  not  had  free  coinage.  It  is  the  re- 
sult of  new  financial  theories,  the  threatened  and  actual 
cliange  in  our  tariff  laws,  and  our  conspiring  to  build 
up  gold  at  the  expense  of  silver,  by  driving  it  out  of 
common  use  in  the  business  and  commercial  centers  of 
our  country. 

American  credit  must  be  sustained  by  Americans. 
Our  prosperity  and  our  ability  to  pay  is  the  crucial 
test  of  our  eredit.     One  thing  is  certain  :  when  we  are 


HOBRIS  M.  ESTBE.  882{ 

not  prospering  at  home  we  have  no  credit  abroad. 
Being  a  debtor  nation,  we  have  no  foreign  balances  in 
our  favor,  and  when  our  exports  do  not  largely  exceed 
our  imports,  gold  leaves,  whether  we  have  the  free  coin- 
age of  silver  or  not.  The  question  resolves  itself  into 
this :  Shall  we  have  two  money  metals  or  none  ?  We 
may  try  to  retain  gold,  but  we  cannot  do  so  if  we 
demonetize  silver.  In  times  of  prosperity  we  receive 
from  abroad  more  money  than  we  pay  out ;  in  times  of 
business  depression  we  pay  abroad  more  money  than  we 
receive  from  there.  This  is  so  because  our  foreign 
creditors  become  alarmed  and  lose  confidence  in  us,  as 
we  lose  confidence  in  our  ability  to  pay.  When  the 
value  of  our  export  products  does  not  equal  what  we 
must  pay  abroad,  and,  as  we  increase  the  amount  and 
value  of  our  imported  luxuries,  we  have  to  meet  the 
difference  in  money ;  and  when  we  join  our  foreign 
creditors  in  declaring  that  silver  is  not  good  money  for 
home  use,  it  will  not  be  good  money  elsewhere.  Thus 
gold  will  go  out  of  the  country  in  the  same  ratio  as  the 
excess  of  imports  comes  into  it. 

American  mines  in  1893  produced  about  145,000,000 
of  gold.  The  arts,  and  losses  in  transportation  and  other 
causes,  took  about  $15,000,000,  leaving  last  yearns  in- 
creased gold  supply  of  the  country  for  coin  purposes, 
if  all  was  retained  here,  about  $30,000,000.  When  we 
bear  in  mind  that  our  increase  of  population  and  of 
business  demands  a  constant  increase  of  money,  it  will 
be  noted  that  this  increase  of  our  gold  supply  will  not 
exceed  the  home  demand,  and  should  the  present  tariff 
laws  be  continued  and  no  change  made  in  our  coinage 
acts,  gold  will  leave  the  country  in  the  future,  to  meet 


884  BILYBB  AND  GOLD. 

our  foreign  obligations  as  it  has  done  in  the  past,  and 
the  more  gold  we  mine,  the  more  will  go  abroad. 

When  we  export  money  we  take  from  our  own  peo- 
ple the  most  potential  instrument  of  trade  and  com- 
merce, but  when  we  export  our  surplus  products,  we 
merely  find  a  market  for  what  we  do  not  wish  to  use  in 
our  own  country,  and  thereby  increase  our  profits.  And 
again:  the  interest  on  American  securities  held  in 
Europe  payable  in  coin  is  enormous,  and  must  be  met ; 
and  yet,  in  view  of  all  these  facts,  we  join  hands  with 
England  in  making  gold  more  and  more  valuable  and 
silver  less  and  less  valuable. 

It  is  only  within  the  past  few  years,  and  with  a  very 
few  nations,  that  silver  has  been  demonetized,  and  yet 
in  those  countnes  where  gold  is  recognized  as  the  only 
money  metal,  paper  is  the  money  of  commerce  because 
business  cannot  be  done  with  gold  alone.  Bank  bills, 
checks  and  drafts  are  the  customary  means  of  trans 
ferring  values. 

Mr.  James  Piatt,  the  great  English  writer  on  finance, 
says: 

"Money  is  nothing  else  than  a  form  of  credit,  a 
thing,  whatever  its  substance,  which  men  by  common 
consent  have  agreed  to  recognize  as  a  symbol  of  wealth." 

As  money  is  a  "  symbol  of  wealth  "  it  would  seem 
that  the  more  money,  the  greater  our  wealth,  unless  the 
increase  of  quantity  decreases  the  quality  or  value,  un- 
til it  ceases  to  symbolize  wealth.  In  this  connection, 
some  things  are  self-evident. 

It  is  a  fact  that  as  there  is  not  enough  gold  to  per- 
form all  the  functions  of  money  or  to  transact  the  busi- 
ness of  the  eountry,  we  must  have  s^me  m«B«y  other 


MOBBIS  M.   E8TEE.  886 

than  gold  ;  that  silver  has  intrinsic  value  and  in  that 
respect  it  is  better  than  paper  money.  Therefore  we 
must  have  some  silver  as  a  part  of  our  '^symbol  of 
wealthy"  for  use  as  change. 

When  we  increase  tlie  forms  of  credit  in  our  coun- 
try, we  enlarge  our  business  possibilities,  and  we  ac- 
complish tliis  by  increasing  the  amount  and  uses  of 
silver  money.  Silver  is  one  of  the  conspicuous  prod- 
ucts of  the  United  States,  the  output  of  our  mines  for 
1893  being  f  77,000,000.  Like  gold,  it  is  used  in  the 
arts  and  as  money.  Millions  and  millions  of  dollars  of 
this  metal  is  in  daily  use  in  gold  countries  as  subsidiary 
coin.  England  is  compelled  to  use  over  $100,000,000 
of  silver  subsidiary  coin  to  make  change.  Is  it  busi- 
ness wisdom  for  America  to  join  England  in  making 
one  of  our  products,  whatever  the  character  of  that 
product,  less  valuable  ?  And  what  adds  to  the  folly  of 
this  act  is,  that  we  assume  to  do  it  in  defence  of  Ameri- 
can credit,  and  we  commence  by  destroying  the  value 
of  millions  of  dollars  of  American  silver.  Every 
thoughtful  man  knows  that  we  could  not  sustain  our 
domestic  or  foreign  credit  an  hour  if  such  credit  was 
based  upon  the  amount  of  gold  in  circulation.  If  the 
people  holding  United  States  currency  should  demand 
gold  from  the  treasuiy  of  the  United  States,  they  could 
not  obtain  it,  nor  could  any  bank  in  the  country  which 
issues  paper  money  redeem  that  paper  in  gold  in  any 
monetary  crisis. 

It  is  clear  that  gold  is  not  omnipotent  as  money,  and 
it  is  equally  clear  that  there  is  not  gold  enough  in  the 
world  to  stand  behind  and  sustain  the  world's  credit  or 
to  transact  the  world's  business.  Nor  is  there  gold 
enough  in  the  United  States  to  stand  behind  and  sot* 


886  SILVER  AND  GOLD. 

tain  Ainericciu  credit.  Gold  and  silver  combined  can 
come  nearer  accomplishing  this  purpose.  If  silver  is 
used  at  all  as  money  it  should  be  given  full  credit  to 
the  extent  of  the  amount  required  for  circulation,  and 
the  largest  possible  amount  should  be  put  in  circula- 
tion, because  this  would  enlarge  our  credit.  The  name 
of  gold  is  used  for  big  transactions,  but  the  fact  is  gold 
itself  is  not  used.  When  great  financial  stress  comes 
gold  is  of  little  value  to  the  business  world,  because 
the  business  world  cannot  get  it.  It  is  then  hidden 
away  by  those  who  wish  to  save  something  from  the 
general  wreck. 

Hoarded  money  is  non-earning  money.  The  secret 
of  business  success  is  to  have  every  dollar  earning 
something  and  to  have  every  man  emploj^'ed  and  at  fair 
wages.  Work  is  a  source  of  wealth.  We  cannot  have 
labor  without  laborers,  but  we  can  increase  wealth 
without  increasing  the  number  of  millionaires.  This 
should  be  the  chief  purpose  of  our  financial  legislation. 

The  value  of  money  depends  largely  upon  what  is 
done  with  it  at  home  and  not  upon  what  it  will  bring 
abroad.  Money  which  circulates  most,  whether  gold 
or  silver,  is  the  best  for  the  people  using  it.  Money 
that  every  one  wishes  to  keep  is  of  little  benefit  in 
business,  for,  like  jewels,  it  may  be  too  valuable  for 
use.  All  money  must  have  something  in  it  or  behind  ii» 
The  security  standing  behind  money  is  in  most  ca8&> 
the  wealth  of  the  nation  issuing  it.  Take  England. 
Its  public  debt  is  $8,277,888,000  payable  in  gold,  and 
yet  the  whole  amount  of  gold  which  England  has  is 
but  $510,000,000.  It  is  thus  observed  that  it  is  not 
English  gold  which  maintainn  F^nglish  credit ;  it  is  her 


MOBBIS  M.   B6TEE.  887 

vast  resoiiices,  her  honor  and  her  custom  of  paying 
what  she  owes. 

Though  gold  is  less  bulky,  it  is  no  more  convenient  a 
form  of  money  than  silver,  and  it  never  has  been  in 
common  use  among  the  masses  of  the  American  people. 
Silver  is  so  used  because  it  is  the  money  of  small  trans- 
actions. Infinitely  more  people  use  silver  than  gold, 
and  therefore  when  we  demonetize  that  metal  more 
people  will  be  injured  than  if  wo  should  demonetize 
gold.  Small  transactions  multiply  as  our  population 
increases,  and  it  is  these  transactions  which  sustain  the 
home  markets,  the  business  enterprises  and  the  credit 
of  the  nation.  It  is  the  modest  accumulations  of  the 
many  and  not  the  vast  fortunes  of  the  few  which  most 
benefit  the  country.  Wall  street  could  not  exist  an 
hour  but  for  the  great  Republic  with  its  teeming  wealth 
and  its  65,000,000  of  people  which  stand  behind  it.  It 
is  the  fact  that  it  is  the  clearing-house  for  the  business 
enterprises  of  the  nation  which  makes  it  powerful.  In 
itself  and  of  itself  Wall  street  creates  nothing,  has  no 
power  and  no  credit  except  such  as  the  rest  of  the 
country  gives  to  it. 

If  it  were  possible  to  have  an  international  coin,  with 
a  fixed  international  value,  it  would  doubtless  be  better 
for  the  people  of  the  world.  This  at  present  is  impos- 
sible, but  when  we  have  both  gold  and  silver  we  have 
a  metallic  money  which  will  fit  every  transaction  and 
which  will  find  its  way  into  every  man's  pocket.  The 
tendency  then  is  to  distribute  wealth  more  uniformly 
among  the  people  and  thereby  benefit  the  nation. 
Hence  the  first  duty  of  this  country  would  seem  to  be 
to  build  up  its  own  industries  by  the  wise  use  of  its  own 
money,  then  its  credit  abroad  will  care  for  itself. 


888  SILVER  AND  GOLD. 

A  country  like  the  United  States,  which  is  so  busy 
maintaining  its  foreign  credit  that  it  forgets  to  pay  any 
attention  to  its  home  industries,  cannot  long  maintain 
either  its  foreign  or  domestic  credit.  More  of  the 
American  people  have  been  out  of  employment  the  past 
two  years  than  at  any  other  period  in  thirty  years.  New 
systems  of  revenue  and  of  finance  have  been  introduced 
until  we  have  but  little  revenue  and  even  less  knowl- 
edge of  finance.  We  have  been  trying  to  legislate  con- 
fidence into  the  country  by  driving  money  out  of  it. 
True  some  of  the  financiers  of  New  York  and  of  En- 
gland declare  that  free  coinage  of  silver  will  disrupt  our 
financial  system.  When  a  financial  system  benefits 
only  those  who  have  money  to  loan  it  is  the  wrong  sys- 
tem and  should  be  disrupted.  The  present  system  is 
un-American  and  it  should  be  done  away  with.  It  is 
also  claimed  that  if  we  coin  silver  gold  will  leave  the 
country.  Is  this  true  ?  Gold  is  leaving  the  country 
now  faster  than  the  government  can  borrow  it,  and,  as 
stated,  it  will  continue  to  leave  unless  we  have  some- 
thing else  to  send  abroad  to  pay  our  debts.  We  should 
coin  American  money  for  American  circulation,  because 
all  money  is  a  commodity  when  it  leaves  the  country 
which  issues  it.  What  is  of  most  interest  to  us  is  the 
amount  which  the  surplus  products  of  our  farms  and 
our  factories  will  sell  for,  not  what  our  money  will  bring. 
We  have  but  little  money  compared  with  the  limitless 
extent  of  our  productions.  There  has  not  been  three 
months  in  the  last  two  years  during  which  the  produc- 
ing classes  of  America  have  not  lost  more  money  by  the 
depreciation  in  the  value  of  labor  and  the  productions 
of  labor  than  the  full  amount  of  all  the  gold  in  the 
oountry. 


HORBTS  M.   ESTEB.  889 

Our  corporate,  municipal,  state  and  national  bonded 
indebtedness  is  more  than  twenty  times  the  amount  of 
our  gold,  most  of  which  is  payable  in  coin,  and  of  all 
kinds  of  property  we  have  about  $66,000,000,000.  It 
would  be  ridiculous  to  say  that  $500,000,000  of  gold 
could  sustain  the  value  of  all  this  vast  property. 

American  gold  people  cannot  disassociate  the  value 
of  American  gold  and  silver  bullion  in  a  foreign  market 
from  the  value  and  uses  of  American  gold  and  silver 
coin  at  home.  They  talk  of  gold  money  as  though  it 
was  the  only  evidence  of  wealth.  It  is  our  farms,  the 
products  of  our  farms,  our  cities  and  towns,  our  rail-^ 
roads  and  factories,  our  mines  of  gold  and  silver,  of 
coal  and  iron,  the  great  extent  of  our  territory  and  the 
thrift  and  push  and  energy  of  our  people,  which  consti- 
tute our  wealth  and  which  are  the  source  of  our. credit. 

If  the  War  of  1861  were  repeated  there  is  not  a  bank 
in  the  country  which  issues  paper  money  redeemable  in 
gold  that  could,  on  demand,  pay  out  gold  in  twenty-four 
hours  after  the  war  began.  When  our  credit  is  attacked 
gold  does  not  sustain  it.  It  is  simply  the  old  story  that 
when  everybody  wants  gold  there  is  none ;  when  no- 
body wants  it  there  is  plenty.  There  never  can  be  too 
much  metallic  money.  An  abundance  of  gold  and  sil- 
ver never  caused  an  undue  inflation  in  prices.  Gold  is 
needed,  silver  is  needed,  and  property  of  every  kind, 
and  in  vast  amounts,  is  needed  to  sustain  our  business 
credit  and  maintain  our  enterprises.  Tou  cannot  attack 
the  value  of  one  kind  of  property  without  materially 
affecting  the  value  of  all  property. 

Credit  is  born  of  confidence  and  confidence  corner 
from  seeing  the  product  of  the  farm  selling  for  good 
prices,  from  hearing  the  wheels  of  machinery  in  action, 


890  SILYEIi  A£Hf>  \^su*^. 

from  knowing  that  commerce  moves  in  its  wonted 
channels,  from  feeling  the  financial  pulsation  which  an 
increased  output  of  our  mines  gives  to  the  country. 

It  is  a  fact  that  the  value  and  amount  of  silver  money 
in  circulation  largely  fixes  the  value  of  commodities  and 
thns  builds  up  business  confidence.  Look  at  the  rise 
and  fall  of  wheat  and  the  rise  and  fall  of  silver  bullion. 
They  parallel  each  other.  The  fact  is,  the  producers 
of  raw  material  need  more  money  to  sustain  their  busi- 
ness than  any  other  class  of  people,  and  in  a  country 
like  ours  the  parity  of  tlie  coin  value  of  gold  and  silver 
must  be  maintained  or  the  prices  of  products  will  not 
be  sustained.  No  workingman  ever  refused  a  silver 
dollar  in  payment  for  his  labor.  Why  should  the  Wall- 
street  banker  refuse  to  let  that  same  dollar  pass  through 
the  clearing-house  when  he  knows  that  four-fifths  of  the 
American  people  gladly  accept  it  as  money? 

American  markets,  American  labor  and  American 
money  must  be  sustained  at  home.  We  cannot  have 
business  prosperity  when  the  products  of  the  farm  and 
the  factory  sell  at  a  loss.  We  can  no  more  rely  for  our 
success  upon  European  theories  of  finance  than  upon 
Europeiui,  values  of  labor.  This  nation  is  a  nation  unto 
itself.  Our  form  of  government,  the  variety  and  amount 
of  our  productions,  our  vast  territory,  our  isolation  from 
the  older  and  more  populous  civilizations  of  the  world, 
and  the  marvel  and  mystery  of  our  growth,  show  clearly 
that  our  civilization  is  a  creation  of  our  own,  and  not 
an  imitation  of  others. 

In  the  United  States,  the  West  and  »30uth  are  the  pro- 
ducing portions.  The  majority  of  the  people  of  these 
sections  are  in  favor  of  the  free  coinage  of  silver  be- 
cause it  will  make  more  money,  safe  money  and  cheap 


M0BRI8  M.  ESTBB.  891 

money.  The  silver  producers  are  interested  in  the  free 
coinage  of  that  metal,  because  it  will  increase  the 
amount  of  and  the  demand  for  the  productions  of  their 
mines  and  thus  encourage  their  development,  and  en- 
large their  output.  The  debtor  classes,  those  who  owe 
money  to  the  capitalists  of  the  East,  are  interested  in  the 
free  coinage  of  silver  because  they  reason  that  gold  and 
silver  are  the  money  metals  of  the  Constitution ;  that 
when  they  borrowed  the  money  they  now  owe,  gold  and 
silver  were  in  general  circulation  in  the  United  States, 
and  that  after  tlie  creation  of  these  debts,  any  effort 
made  by  the  creditor  classes  to  demonetize  silver, 
thereby  decreasing  the  amount  of  mone}^  in  circulation, 
is  dishonest  because  it  makes  money  dear  and  the  deb^ 
greater. 

The  Sherman  bill  was  a  poor  make-shift  for  free 
coinage,  but  it  was  better  than  nothing.  It  provided 
for  the  purchase  in  open  market  of  $4,000,000  worth  of 
silver  monthly,  and  the  issuance  of  a  like  amount  of 
silver  certificates  as  the  representative  of  that  metal. 
This  act  is  now  repealed,  and  the  plain,  t!ndeniable  re- 
sult of  all  this  financial  legislation  is,  that  the  value  of 
gold  has  increased  and  the  value  of  commodities  has 
uniformly  decreased.  Hence  it  takes  more  of  the  prod« 
ucts  of  labor  or  of  capital  to  pay  any  given  amount  o 
debt  now  than  it  did  when  silver  was  freely  coined. 
Tinkering  with  financial  questions  is  dangerous.  The 
very  uncertainty  which  it  causes  imperils  business  and 
injures  credit  The  remedies  proposed  are  often  worstf 
than  the  disease,  for  stability  is  the  chief  object  to  be 
attained  in  monetary  affairs.  The  fact  that  gold  and 
silver  are  practically  indestructible,  g^ves  to  both  these 
metals  a  monetary  value  in  the  business  and  financial 


r 

r. 


892  SILYEB  AND  GOLD. 

world  wbicb  the  creditor  classes  cannot  destroy,  nor  the 
debtor  classes  unduly  inflate. 

There  is  a  financial  war  in  progress  between  the 
creditor  and  the  debtor  classes,  between  those  who  have 
money  to  sell  and  those  who  have  products  to  sell,  be- 
tween the  producers  and  the  consumers.  The  question 
is,  shall  we  make  money  scarce  and  valuable  and  prod- 
ucts cheap,  or  products  valuable  and  money  cheap? 
The  gold  people  declare  that  the  increase  of  the  pur- 
chasing power  of  gold  and  the  consequent  lowering  of 
tlie  values  of  property  do  not  injure  the  producer,  be- 
cause the  same  amount  of  money  will  buy  a  like  amount 
of  things  now  as  before  the  exaltation  of  gold. 

The  argument  is  specious.  There  are  $500,000,000 
of  gold  in  the  United  States  and  fully  $66,000,000,000 
of  property.  Themost  of  the  American  people  own  some 
property ;  but  there  are  not  to  exceed  10,000  of  the 
American  people  who  have  any  considerable  amount  of 
gold. 

Two  objections  are  urged  against  the  free  coinage  of 
silver :  one  that  it  will  drive  gold  out  of  the  country ; 
the  other  that  it  will  create  an  undue  inflation  of  prices. 
It  has  been  shown  that  the  United  States  is  a  debtor 
nation;  and,  as  we  have  to  pay  to  foreign  peoples  a 
large  amount  of  money  annually,  the  only  way  to  keep 
that  money  at  home  is  to  maintain  prosperity  at  home. 
It  is  axiomatic  that  a  country  is  not  prosperous,  al- 
though its  securities  may  sell  at  a  premium,  if  its  prod- 
ucts sell  at  a  loss.  There  is  something  radically 
wrong  when  national  credit  is  good  and  private  credit 
bad.  The  American  people  are  not  prosperous,  and  the 
best  proof  of  the  unfavorable  condition  of  the  business 
of  the  country  is  that  the  government  is  running  in 


MOBBIS  M.  ESTEE.  898 

4ebt  to  meet  its  usual  and  ordinary  expenses.  Indeed 
it  is  borrowing  money  to  send  out  of  the  country  and 
coining  no  money  which  will  stay  at  home. 

It  has  been  asserted  that  the  free  coinage  of  silver 
will  make  it  necessary  to  protect  our  country  against 
the  undue  importation  of  foreign  silver  bullion  brought 
for  coinage  to  the  mints  of  the  United  States.  This 
will  not  be  the  case  because  most  of  the  foreign  silver 
money  now  in  existence  passes  as  su'ch  at  par  in  the 
countries  coining  it,  and  foreign  silver  bullion  will  not 
seek  American  coinage  unless  it  at  the  same  time  seeks 
American  investment,  because  while  American  coined 
silver,  like  American  coined  gold,  is  money  here,  it  is 
only  a  commodity  abroad,  and  will  there  sell  as  bullion. 
And  suppose  all  the  United  States  mints  should  coin 
silver  only,  they  could  not  produce  one  dollar  a  year  for 
each  inhabitant.  The  country  can  stand  that  much  in- 
flation. 

On  the  81st  of  December,  1893,  there  were  175,441 
miles  of  completed  railroad  in  the  United  States. 
These  roads  were  built  at  the  nominal  cost  of  $11,855,- 
968,166  and  their  outstanding  liabilities  are  |11,448,- 
888,892.  Of  this  vast  amount  $5,470,292,718  is  bonded 
indebtedness,  most  of  it  due  in  twenty  years.  A  large 
portion  of  this  bonded  indebtedness  is  held  in  Europe, 
the  principal  and  interest  payable  in  coin.  It  is  thus 
inevitable  that  for  this  purpose  alone,  and  for  many 
years  to  come,  there  wiU  bei  a  large  European  demand 
for  American  gold.  In  view  of  these  facts,  a  necessity 
for  an  increased  coinage  of  silver  seems  apparent.  The 
fact  is,  gold  cannot  be  obtained  to  meet  our  ever-ac- 
cumulating foreign  indebtedness  unless  our  exports  of 
products  are  largely  inereased.    A  day  of  reckoning 


894  SILVIEB  AHD  GOIJ>. 

will  come.  Let  a  great  war  break  out  and  note  the  re* 
salt.  Instead  of  one-sixth  of  all  the  railroads  of  the 
country  being  in  the  hands  of  receivers,  as  is  the  case 
now,  five-sixths  of  them  will  be  in  that  condition.  This 
would  destroy  public  and  private  credit.  It  would  do 
more  harm  than  to  pay  our  debts  in  silver  for  a  centur}^ 
The  business  world  cannot  pay  its  debts  in  gold ;  and 
that  country  which  adopts  both  metals  as  the  basis  of 
its  monetary  system  will,  in  the  long  run,  have  more 
money,  better  money,  and  will  do  more  business  at  home 
and  a  safer  business  abroad  than  under  a  single  standard. 
If  foreign  wars  or  foreign  trade  take  the  gold  out  of  the 
country,  silver  will  remain ;  if  silver  goes,  gold  will  re- 
main. 

If  asked  to  suggest  a  remedy  for  present  conditions, 
three  present  themselves.  Neither  one  may  fully  meet 
expectations.     They  are : 

1.  The  full  and  unlimited  coinage  of  silver. 

2.  The  free  coinage  of  silver  produced  in  the  United 
States. 

8.  The  equal  coinage  of  both  gold  and  silver. 

No  one  man  ever  invented  a  perfect  financial  system ; 
it  can  not  be  created  alone  by  legislative  enactment ;  it 
is  a  growth  ;  it  comes  with  the  varied  teachings  of  suc- 
cess and  failure. 

The  position  of  the  United  States  on  the  Western 
Continent  and  in  the  financial  world,  demands  that  it 
should  have  a  distinctive  financial  policy.  We  cannot 
imitate  the  English  principles  of  revenue  and  finance 
unless  we  do  so  at  the  expense  of  our  own  people.  The 
Uuited  States  produce  gold  and  silver  in  large  quanti- 
ties. We  produce  more  raw  material  than  any  other 
people,  and  if  we  protect  our  home  markets  and  con- 


HORBIS   M.   ESTEE.  895 

tnme  at  home  to  the  extent  of  our  needs  what  we  pro- 
duce  at  home,  our  exports  will  exceed  our  imports  and 
gold  will  not  leave  the  country. 

The  principle  of  protection  and  the  free  coinage  of 
silver  are  both  necessary  to  the  fullest  and  highest  in- 
dustrial development  of  America. 

In  conclusion,  there  is  a  selfish  side  to  the  money 
question.  The  people  who  have  gold  want  to  make  it 
more  valuable ;  the  people  who  have  silver  want  to 
make  it  more  valuable.  The  gold  people  want  to  de- 
monetize silver  because  it  is  cheap,  and  to  do  this  they 
would  drive  out  of  the  world's  money  circulation  $4,- 
000,000,000  of  silver.  But  the  great  masses  of  the  en- 
terprising people,  the  producers  of  wealth,  those  who 
have  their  fortunes  yet  to  make,  want  both  money 
metals,  because  this  will  create  more  metallic  and 
cheaper  money  and  thus  encourage  and  promote  private 
enterprises. 

Hitherto  the  American  producers  have  been  num- 
bered among  the  voiceless  millions,  but  they  will  be 
heard  at  the  next  presidential  election.  It  is  a  happy 
omen  for  the  future  of  American  politics  that  new  is- 
sues are  being  submitted  to  the  people.  As  a  result 
past  dissensions  will  be  forgotten,  different  sectional 
lines  will  be  drawn  as  new  principles  are  evolved, 
parties  will  divide  on  the  money  question,  and  that 
party  which  either  evades  the  free  coinage  of  silver  or 
is  opposed  to  the  same,  will  fail. 

In  the  United  States,  as  elsewhere,  money  is  power, 
and  every  year  the  rich  are  becoming  more  powerful. 
Those  who  have  little  are  naturally  jealous  of  those 
who  have  much.  The  responsibility  resting  upon  the 
rich  is  becoming  greater.     Money  cannot  safely  cerner 


896 


BniYEB  AND  GOLD. 


the  industrial  pursuits  of  a  great  nation.  A  free  people 
may  be  deceived  and  misled  for  a  time,  but  in  the  end 
they  will  do  the  right  thing.  While  the  influence  of 
Wall  street  is  great,  as  a  factor  in  American  politics 
its  very  name  is  a  source  of  weakness,  and  in  the  near 
future  American  finance  will  figure  in  American  poll- 
tics. 


V^  or  Tirt  "*>f^ 


172717? 


-Tr 


\ 


Ojt 


■  \ 


BENJAMTN  HARRISON, 


JAHAS  H.  ECKELS.  899 


CHAPTER  XXn. 

BT    JAliBS    H.    ECKELS,    COMPTBOLLEB    OF    THE    CUB- 

BENCY. 

It  must  be  evident  to  any  one  who  will  examine 
into  the  present  status  of  the  agitation  for  the  free 
coinage  of  silver  that  no  argument  can  be  adduced  by 
those  who  are  opposed  to  it  which  will  in  any  wise  af- 
fect public  opinion  in  the  distinctively  silver-producing 
states.  The  business  men  of  those  states,  not  less  than 
the  leaders  of  political  parties,  make  tlieir  demand  with 
the  end  in  view  of  securing  a  fixed  and  profitable  mar* 
ket  for  that  which  they  consider  their  most  valuable 
product.  The  elements  of  harm  to  safe  national 
financiering  and  right  principles  in  currency  legislation 
apparently  do  not  enter  into  their  view  of  the  question, 
and  therefore  many  of  the  propositions  which  they  pre: 
sent  are  faulty  in  statement  and  wholly  unstained  by 
either  the  basic  elements  of  sound  finance  or  the  his- 
torical facts  of  this  and  other  countries.  Fortunately 
for  the  public  good  the  group  of  states  thus  directly 
interested  in  subjecting  the  American  people  to  yield- 
ing tribute  to  them  is  small,  both  in  numbers  and  popu- 
lation, as  compared  with  the  whole.  The  threats,  there* 
fore,  of  their  political  leaders,  impartially  made  by 
both  republican  and  democrat,  or  party  secession 
ought  not  to  have  the  effect  of  driving,  for  political 
reasons,  the  great  body  of  the  people  into  taking  such 
action    as  must  inevitably   bring  disaster   upon    all. 


400  SBLTSB  AJSD  GOLD. 

Heretofore  when  called  upon  to  deal  with  questions  of 
a  similar  character  the  great  mass  of  opinion  has  at  the 
critical  time  always  been  found  to  be  npon  the  right 
side.  There  is  reason  to  believe  that  in  the  present 
instance  no  exception  to  the  unvarying  rule  will  be 
had. 

This  result  will  be  attained  quite  as  much  through 
the  manner  of  campaign  of  the  advocates  of  free  coinage 
alluded  to  as  by  the  educational  method  pursued  by 
those  who  combat  them.  The  proponents  of  free  coin- 
age of  silver  may  fairly  be  charged  with  having  sys- 
tematically withheld  from  those  whose  aid  they  have 
sought  a  full  and  true  statement  of  the  historical  and 
other  facts  relative  to  this  question,  a  knowledge  of 
which  is  necessary  in  order  to  form  a  proper  judgment 
of  the  merits  of  the  controversy.  This  has  been  no- 
where so  manifest  as  in  the  manner  in  which  the  ques^ 
tiou  of  the  treatment  of  silver  as  a  money  metal  by  tins 
and  other  governments  since  1873  has  been  presented 
by  them.  Wherever  the  figures  have  not  been  actually 
perverted  the  matter  has  been  so  slurred  over  as  to 
create  the  impression  that  all  gold-standard  countries 
have  in  their  abandonment  of  the  further  coinage  of 
silver  also  abandoned  the  further  use  of  that  which 
they  then  had.  The  figures  are  at  hand  to  demon- 
strate not  only  what  little  ground  there  is  for  this  com- 
plaint but  to  Bhow  as  well  how  very  much  silver  is  held 
by  the  particular  countries  of  which  the  silver  agitator 
now  most  bitterly  complains.  The  great  part  of  this 
total  amount  of  legal  tender  silver  coins  was  added 
during  the  period  of  what  they  term  "  silver  discrimi- 
nation and  falling  prices.'*  This  is  almost  entirely  the 
oase  in  this  country.    Prof.  LexiS|  who  is  regarded  as  a 


JAMES  H.   ECKELS.  401 

standard  authority  upon  momentary  statistics^  has 
recently  called  attention  to  this  very  significant  fact, 
and  given  figures  which  show  Germany  to  have  at 
present  400,0:)0,000  marks  in  thalers  besides  400,000^ 
000  marks  in  fractional  silver.  France  and  the  other 
states  of  the  Latin  Union  have  not  less  than  3,000,000,- 
000  marks,  or  $714,000,000  in  silver  6-franc  pieces. 
Spain  coined  from  1876  to  1892,  641,000,000  peseta 
pieces,  while  both  the  Netherlands  and  Austria-Hungary, 
notwithstanding  their  introduction  of  the  gold  standard, 
have  kept  all  of  their  legal  tender  silver  pieces.  The 
annual  coinage  of  silver  in  India  up  to  June  26,  1898, 
was,  at  the  ratio  of  1  to  15,  from  $130,000,000  to  $140,- 
000,000,  while  in  China  and  Japan  the  amount  which 
could  be  used  for  monetary  purposes  is  not  limited. 

More  significant  than  all  this,  however,  was  the  coin- 
age at  our  own  mints  during  the  period  from  1878  to 
January,  1895.  The  total  coinage  of  silver  in  this 
country  prior  to  1873,  under  conditions  now  reverted 
to  by  the  advocates  of  free  coinage,  was  but  $143,465r 
150.70,  the  greater  part  of  which  was  in  fractional  coins. 
In  the  years  since  1873,  the  years  when  most  has  been 
heurd  of  silver  not  being  accorded  to  its  proper  place  in 
our  money  issues,  there  have  bfeen  put  forth  by  the 
government  with  full  legal  tender  properties  given 
them  $588,444,468.45  either  in  silver  coin  or  the  repre- 
sentative thereof.  This  remarkable  increase  in  our 
legal  tender  silver  currency  has  been  the  constant  sub- 
ject of  remark  on  the  part  of  those  who  have  witnessed 
unprejudiced  the  agitation  carried  on  here  for  a  larger 
coinage  of  silver  and  analyzed  the  reasons  assigned  for 
It.  Nothing  more  philosophic  nor  more  worthy  of 
study  on  the  part  of  our  citizens  relative  to  the  same 


402  SILVER  AND  GOLD. 

has  been  suggested  than  the  following  query  of  the 
author  heretofore  referred  to : 

*^  The  question  which  I  have  repeatedly  put  to  the 
defenders  of  the  opinion  that  there  has  been  an  in- 
trinsic appreciation  of  gold  has  never  yet  been  an- 
swered. The  question  is  this,  and  it  has  reference  to 
the  United  States :  How  has  it  been  possible  that  the 
United  States,  which  from  1878  to  1898  issued  more 
silver  money  or  silver  covered  notes  than  all  the 
European  states  taken  together  had  issued  in  a  like 
period  previous  to  1873  and  more  than  it  would  have 
been  called  upon  to  coin  under  the  system  of  universal 
international  bimetallism,  I  ask  how  has  it  been  possible 
that  the  United  States,  which  produces  annually  $33,- 
320,000  gold  and  coins  in  correspondingly  large  sums, 
and  which  moreover  has  maintained  in  circulation 
J5>3-16,000,000  of  paper  currency,  with  its  defacto  double 
standard  and  the  superabundance  of  media  exchange, 
has  suffered  from  a  perhaps  still  greater  depression  than 
that  assumed  to  have  been  produced  in  Europe  by  gold 
monometallism,  and  that  the  prices  of  coipmodities  of 
the  United  States,  notwithstanding  the  Chinese-like  iso- 
lation of  its  market  by  a  protective  tariff  wall,  have 
shown  the  same  downward  movement  that  we  find  in 
Europe?  Is  it  not  plain  that  the  movement  of  prices 
which  in  two  regions,  with  the  condition  of  the  stand- 
ard so  entirely  different,  but  which  manifest  the  same 
effects  and  the  same  course  of  things,  must  have  other 
causes  than  the  demonetization  of  silver,  which  did 
not  begin  in  the  United  States  until  the  repeal  of  the 
purchasing  clause  of  the  Sherman  act,  but  which  has 
left  $567,000,000  in  silver  credit  money  in  circulation 
at  its  full  nominal  value  ?  " 

A  second  criticism  which  may  justly  be  passed  upon 
the  advocates  of  the  free  coinage  of  silver  is  their  re* 
f  usal  to  grant  that  the  increase  in  this  country  of  bank* 
ing  facilities  during  the  years  from  1873  have  in  any 


JAMES  H.  ECK£LS.  408 

wise  made  unnecessary  a  further  extravagant  enlarge- 
ment of  our  silver  metallic  currency. 

It  must  be  evident  to  the  student  of  financial  prob- 
lems that  the  continued  improvement  in  banking 
methods  renders  less  necessary  the  employment  of  a 
large  metallic  curiTency.  These  banking  refinements 
of  ours,  imperfect  as  they  are,  have  played  no  insig- 
nificant part  in  the  country's  monetary  history  through- 
out the  last  two  decades.  The  statistics  of  the  national 
banks  alone  show  their  number  to  have  increased  from 
1,968  with  individual  deposits  of  $641,121,775  in  1873 
to  3,711  with  individual  deposits  of  $1,690,961,299  on 
May  7,  1895.  The  increase  has  been  correspondingly 
great  in  state,  savings,  private  banks  and  trust  com- 
panies. All  this  has  added  to  the  available  capital  of 
the  people,  reduced  rates  of  interest  everywhere,  less- 
ened their  need  of  a  further  expansion  of  our  money 
circulation  and  given  to  them  a  currency  which  is 
sufficient.  Every  dollar  deposited  in  a  bank  is  so  much 
idle  capital  turned  into  a  channel  of  usefulness  and 
made  to  bear  instead  of  the  weight  of  a  single  trans- 
action, as  is  the  case  with  cash  instead  of  check  pay- 
ments, the  weight  of  many  different  transactions.  In 
no  other  country,  excepting  possibly  Scotland,  is  the 
deposit  feature  of  banking  so  prominent  as  it  is  here. 
It  is  so  much  the  principal  thing  in  banking  with  us 
that  the  circulation  feature  is  but  an  incident  to  it. 
It  is  almost  unpracticed  by  the  people  of  continental 
Europe,  and  hence  the  benefit  of  credit  instruments 
which  is  available  to  us  is  wanting  to  them.  They, 
from  force  of  habit  and  methods  of  business,  can  justify 
a  large  volume  of  circulating  media ;  we  cannot.  The 
number  of  depositors  in  th«  banks  and  kindred  institu- 


404  8ILV£B   AND  GOLD. 

tioiis  in  the  United  States,  according  to  statistics  care- 
fully gathered,  are  8,192,749,  a  power  so  great  as  to 
cause  the  leading  banking  magazine  of  Great  Britain 
to  say  in  its  latest  issue  in  commenting  upon  the  fact : 

*^The  tendency  of  deposits  in  banks  working  in 
progressive  districts  is  to  increase,  and  we  may  feel 
certain  that  this  will  be  the  case  with  the  customei-s 
of  the  banks  of  the  United  States.  The  9,000,000 
depositors  in  banks  form  a  force  unparalleled  in  any 
other  country.  The  inference  we  may  draw  from  the 
figures  before  us  is  that  we  must  look  for  sharper  com- 
petition on  the  other  side  of  the  Atlantic,  and  while 
with  care  and  prudence  we  may  hope  to  hold  our  owUf 
it  is  only  by  the  most  careful  employment  of  our  re- 
sources that  we  may  hope  to  retain  our  position.'^ 

The  advocates  of  the  free  coinage  of  silver  have 
continually  protested  that  the  end  sought  by  them  is 
the  coinage  of  silver  under  the  conditions  which  pre- 
vailed prior  to  1873.  A  casual  investigation  even 
will  prove  that  they  do  not  desire  any  such  thing. 
The  idea  in  the  enactment  in  every  coinage  law  from 
the  establishment  of  the  government  to  1878  was  to 
have  the  coins  be  approximately  of  the  same  com- 
mercial value  without  the  government's  stamp  affixed, 
as  they  would  do  with  it.  A  very  small  fractional 
difference  was  to  be  made  in  favor  of  the  coins  simply 
to  prevent  their  being  too  readily  sent  to  the  melting 
pot.  Whatever  increased  value  the  stamped  coin  had 
over  the  unstamped  metal  was  the  result  of  the  con- 
venience arising  from  its  use  in  business  transactions. 
It  never  was  seriously  suggested  by  any  advocate  of  the 
free  coinage  of  silver  until  the  present  agitation  that 
the  commercial  value  of  the  metal  should  be  disre* 


JAMES   H.   ECKELS.  405 

garded  and  an  artificial  value  fixed  by  law.  It  is 
to  be  remembered  that  the  ratio  of  16  to  1  in  1895  is 
a  very  different  thing  from  the  ratio  of  16  to  1  in  1878. 
The  very  fact  that  those  who  control  this  movement 
object  to  adopting  as  a  part  of  their  silver  creed  any- 
thing more  from  the  coinage  laws  prior  to  1878  than 
the  mere  figures  of  ratio  is  sufficient  to  prove  that 
they  are  insincere  in  their  demand  for  the  enactment  of 
a  law  similar  to  the  earlier  coinage  acts.  If  not,  they 
would  accept  the  spirit  and  the  reason  of  the  law  as 
readily  as  the  bare  ratio  which  they  desire  to  take  from 
it.  The  cause  of  their  not  so  doing  is  to  be  found  in 
the  change  in  the  relative  value  of  the  bullion  value  of 
a  silver  dollar  then  and  now.  In  1878  the  average 
value  of  the  bullion  in  the  silver  dollar  was  f  1.004. 
The  first  quarter  of  1895  it  was  $0,469.  A  careful 
calculation  shows  that  pure  silver  was  worth  in  1876 
only  89  per  cent,  of  its  value  in  1872;  in  1881  only 
84  per  cent.;  in  1866  only  77  per  cent.;  in  1889  only 
70.9  per  cent.,  and  in  the  first  quarter  of  1895  only 
46  per  cent.  During  the  first  five  years  it  lost  11  per 
cent,  of  its  value;  during  the  fi^t  ten,  16  per  cent.; 
during  the  first  fifteen,  23  per  cent.,  and  during  the 
twenty-three  years  since  1872,  54  per  cent.  It  must 
be  manifest  that  a  metal  so  changeable  in  value  is 
wholly  unsuited  for  the  purposes  of  being  a  standard 
of  value. 

Louis  Wolowski,  in  his  testimony  before  the  French 
commission  of  inquiry  into  the  principles  and  facts 
governing  the  monetary  and  fiduciary  circulation  of 
1865,  said : 

^  The  instrument  of  exchange  should  always  be  a 


406  StLYEB  AND  GOLD. 

measure,  and  at  the  same  time  an  equivalent;  it  should 
be  constantly  equal  to  itself  (that  is  always  have  the 
same  value);  it  should  be  susceptible  of  conservation 
without  abration  or  loss,  and  circulate  with  facility ;  it 
should  be  divisible  into  fractious  reunitable  at  will ;  it 
shotdd  be  made  of  a  substance  not  destined  for  de- 
structive consumption,  in  order  that  the  existent  mass 
thereof  may  be  only  slightly  affected  by  new  additions 
thereto,  for  it  cannot  be  too  frequently  repeated  that 
the  first  and  fundamental  condition  of  the  measure  of 
value  is  its  stability  during  the  periods  which  em- 
brace the  habitual  transactions  among  men." 

The  history  of  silver  throughout  these  years  when 
the  production  of  it  has  so  far  exceeded  that  which  was 
prior  to  1878  only  sufficient  for  the  use  and  the  waste 
of  it  demonstrates  that  it  neither  meets  the  requisites 
of  a  standard  of  value  as  given  by  Wolowski  nor  that 
demanded  by  Leon  Say,  who  stated  that  the  most  es- 
sential quality  of  money  is  **  that  in  the  variations  of 
its  value,  that  is  of  the  metal  of  which  it  is  composed, 
there  should  be  as  few  fiuctuatiotis  as  possible.  These 
fluctuations  will  be  smaller  in  proportion  as  the  metal 
in  question  enters  more  extensively  and  regularly  into 
trade,  has  a  constant  production  and  one  propoi*tionate  to 
human  wants,  profits  and  efforts,  a  well-guaranteed  manu- 
facture, a  conventional  legal  tender  power  in  conform- 
ity with  that  recognized  by  public  opinion,  and  is 
issued  in  the  form  of  coin,  scrupulously  measured  by 
strict  necessity." 

It  has  long  been  held  that  the  best  theoretical 
money  would  be  of  gold  and  silver  coins  stamped  with 
no  other  mark  excepting  those  indicating  their  weight 
and  fineness,  and  no  other  value  than  their  current 
commercial  value.     Such  was  the  system  in  vogue  at  a 


JAMBS  H.   ECKELS.  407 

time  >9\te*A  «oibwerQial  transactions  were  few  in  number 
and  involving  sm&All  amounts,  but  now  that  the  number 
of  them  is  almost  beyond  calculation,  and  the  sum  total 
of  values  affected  i>y  them  correspondingly  vast,  the 
world  demands  as  has  been  well  said  *^  a  money  sys- 
tem which  requires  of  those  who  use  it  neither  cal- 
culation nor  even  reflection."  Metal  moneys  having 
in  the  first  instance  boon  based  wholly  upon  com- 
mercial values  the  friends  of  the  free  coinage  of  silver 
in  this  country  must,  in  ojder  to  prove  their  fairness 
and  unwillingness  to  be  party  to  the  issuing  of  a  dol- 
lar which  does  not  have  the  value  of  a  dollar,  cease 
insisting  upon  the  coinage  of  silver  at  any  other  ratio 
than  its  commercial  ratio. 

It  is  problematical  whether  ov  no  silver  can  ever 
again  be  accepted  as  a  money  met^l  of  other  than  a 
secondary  class,  even  though  all  the  ^reat  commercial 
nations  of  the  world  should  join  in  an  international 
agreement  to  maintain  it  on  a  footing  With  gold.  It  is 
absolutely  certain  that  the  United  Stateo  is  unable  of 
itself  to  force  its  so  being  accepted.  Tho  position  of 
the  people  of  this  country  is  that  of  a  debtoir  and  not  a 
creditor  nation.  As  long  as  we  are  compellod  to  bor- 
row and  to  seek  for  investors  in  American  enterprises 
among  the  moneyed  people  of  England  and  tho  conti- 
nent we  are  not  in  a  position  to  maintain  a  defiant  at- 
titude on  this  silver  question.  It  may  be  heroic  ^o  to 
do,  but  it  is  none  the  less  absurd.  It  will  be  time 
enough  to  undertake  to  reverse  the  facts  of  all  financial 
history  and  monetary  experience  when  we  are  free 
from  debt  and  are  lending  to  our  European  neighbors. 
Until  that  point  is  reached,  however,  we  must  recog- 
nize that  this  whole  question  must  be  dealt  with  from 


408 


3ILV£B  AVD  GOLD. 


a  practical  and  not  from  a  sentimeDtal  standpoiut,  and 
we  must  deal  with  the  fiacts  as  they  are  and  not  as  we 
thej  might  be. 


WILLIAM  P.  ST.  JOHN.  409 


CHAPTER  XXIII. 

BT  WM.  P.  ST.  JOHK,  PBESIDENT  OF  THB  MEBCAKTILE 
NATIONAL  BANK  OP  NEW  YOBK. 

Undeb  official  dictation,  tutored  by  the  one  most 
aggressive  of  all  our  handful  of  ^*  goldites ''  in  the 
United  States,  congress  fiddles  with  bank  notes  while 
the  burning  issue  is  our  primary  money. 

Identically  tutored,  our  Chief  Executive  has  required 
his  Secretary  to  abandon  the  option  confeiTed  by  law 
upon  the  United  States  and  grant  to  holders  of  the 
United  States  notes  the  right  to  exact  gold  always, 
silver  never,  as  their  redeeming  coin.  Had  the  option 
to  redeem  in  silver  dollars  been  exercised  boldly  at  the 
time  when  only  3,000,000  silver  dollars  were  owned  by 
the  United  States,  with  an  ownership  of  W  16,000,000 
gold,  any  possible  alarm  could  have  been  laughed  to 
scorn.  To  attempt  to  seize  upon  and  exercise  the  op- 
tion now,  or  under  immediately  prospective  conditions 
of  our  treasury,  would  be  to*  court  all  the  perils  of 
disaster. 

Identically  tutored,  the  demand  appears,  ^^one  step 
at  a  time,**  to  substitute  bank  promises  of  money  for 
^907,000,000  of  the  primary  and  secondary  money 
which  they  promise.  Were  the  scheme  adopted  and 
successful,  the  result  achieved  would  be  $907,000,000 
of  new  bank  promises,  $207,000,000  of  existing  bank 
promises,  and  91,700,000,000  of  promises  called  depos- 
its, an  aggregate  of  (12,854,000,000   of   national-bank 


ilO  81LYEK  AND  GOLD. 

tiabilities  payable  on  demand,  resting  or  wrangling  on 
our  available  supplies  of  gold.  The  pretense  of  the 
tuition  is  that  this  is  **  sound  finance.*' 

Redundant  bank  notes  have  invariably  banished  gold 
and  silver.  They  never  were  suspected  of  enticing 
either  into  money.  And  national  banks  cannot  hope 
for  popular  consent  to  their  redeeming  their  circulating 
notes  in  o£Scially  discarded  paper  dollars. 

Money  is  the  creature  of  law.  Money  is  all  domestic. 
Our  $10  gold  piece  is  accounted  258  grains  of  nine- 
tenths  fine  gold  when  beyond  the  jurisdiction  of  the 
United  States. 

Money  and  the  yardstick  have  nothing  in  common. 
The  yardstick  is  an  exact,  unvarying  measure  of  length. 
Money  is  an  uncertain,  variable  measure  of  varying 
values.  The  yardstick  is  not  bartered  for  commodities. 
Money  is  the  means  of  acquisition  and  momentarily  the 
measure  of  value  of  the  thing  acquired.  The  yard- 
stick is  a  unit  of  length.  The  dollar  as  a  *^  unit  of 
value"  is  preposterous.  Our  Hamilton- Jefferson  stat- 
ute, founding  the  mint,  provided  a  dollar  as  our  *^  unit 
of  account/'  That  dollar  of  1792  and  the  dollar  of 
1894  contain  identically  871.25  grains  of  silver. 

The  aggregate  of  all  money  afloat  and  in  bank  in  the 
United  States  is  our  true  measure  of  normal  value  of 
commodities  here.  The  aggregate  of  money  of  all  na- 
tions trading  internationally  is  the  measure  of  normal 
value  of  all  commodities  consumed  by  all.  Therefore, 
to  enlarge  the  aggregate  of  money  in  the  trading  world 
is  to  raise  normal  prices  of  commodities  everywhere. 
To  enlarge  the  aggregate  of  money  in  the  United  States 
is  to  raise  normal  prices  for  home  and  internationally 
consumed  commodities  here.    Per  contra,  to  diminish 


WILLIAM  P.  ST.  JOHN.     .  411 

the  aggregate  of  money  in  the  United  States  is  to  lower 
all  normal  prices  here  ;  and  to  diminish  the  world's  ag' 
gregate  of  money  is  to  lower  all  normal  prices  of  inter- 
nationally moving  commodities  in  all  the  trading 
world. 

Omniscience  and  infinite  integrity  in  law-making,  but 
nothing  short  of  these,  would  yield  perfection  in  money. 
Perfection  in  money,  thus  provided,  would  involve  the 
use  of  neither  gold  nor  silver,  nor  any  other  commodity. 

Now,  if  my  caution  against  it  will  be  quoted  along 
with  my  description  of  it,  I  will  describe  perfect  money, 
to  wit: 

Any  convenient  substance  of  about  the  "  intrinsic  " 
properties  of  silk-rlbbed  paper  prepared  to  defy  the 
counterfeiter,  issued  by  authority  of  the  law  of  the 
United  States,  and  promising  no  redemption  whatever, 
except  acceptance  for  all  dues  to  the  United  States, 
and  also  made  receivable  and  payable  for  all  dues  and 
debts,  public  and  private,  within  the  jurisdiction  of  the 
United  States.  But  my  caution  against  any  attempt  at 
such  perfection  in  money  of  the  United  States  is  that 
imperfect  humanity  has  not  been  more  safe  to  handle 
any  near  approach  to  it,  nor  with  any  other  than  com- 
modity money,  than  children  are  to  toy  with  keen -edged 
tools. 

If  United  States  notes  of  1862  and  treasury  notes 
of  1890,  together  f497,000,000  were  retired,  they  might 
all  be  replaced  with  logically  perfect  money  as  de- 
scribed, provided  silver  dollars  and  certificates  and  bank 
notes  were  also  all  retired.  The  success  of  the  issue 
would  insure  overissue,  and  then  collapse. 

Bank  notes  differ  only  in  degree  from  treasury  notes, 
for  this  same  peril  is  lurking  in  them.    The  wary  can  ea< 


412  BILVEB  AND  GOLD. 

cape  a  degree  of  peril  in  the  bank  note,  refusing  it  as 
not  a  legal  tender.  But  the  peril  i»  in  the  bank  note, 
nevertheless,  as  Jefferson  and  Andrew  Jackson  knew. 
Nature's  restrictions*  upon  the  world's  supplies  of  gold 
and  silver,  and  the  burden  of  the  art  and  industrial 
uses  for  these  commodities,  make  these  safer  than  ir- 
redeemable paper  as  our  tool  of  trade. 

Gold  bullion  and  United  States  gold  coin  enter 
Europe  with  one  and  the  same  right  conferred  by  law, 
the  right  of  transition  into  English  money  at  the  price 
of  ^3  178.  10^(2.  per  Troy  ounce,  eleven-twelfths  and  1 
penny-weight  fine.  By  law,  France,  Germany,  and  the 
other  important  continental  states  similarly  endow 
gold.  And,  by  virtue  of  our  law,  gold  carries  the  right 
of  transition  into  the  money  of  the  United  States  at 
the  fixed  price  of  28.22  grains  pure,  or  25.8  grains  nine- 
tenths  fine,  for  a  dollar. 

Thus,  by  law,  the  market  price  and  mint  price  of  gold 
are  one  and  the  same,  so  long  as  there  is  gold  produced 
each  year  more  than  the  arts  and  industries  and  India 
absorb.  For  so  long,  gold  in  the  lump,  its  weight  and 
fineness  being  known,  is  the  equivalent  of  coin  in 
Europe  and  the  United  States,  for  the  reason  that  the 
yx)ssessors  of  gold  will  accept  no  lower  price  while  the 
mint  price  is  offered  in  lawful  money  at  the  mint ;  and 
artisans  will  not  pay  more  for  gold  because  it  is  obtain- 
able at  the  mint  price  by  melting  the  coin. 

Imagine  all  these  mints  of  Europe  and  the  United 
States  to  deprive  gold  of  all  further  right  of  transition 
into  money.  Imagine  the  law  of  each  of  all  these  na- 
tions to  grant  to  silver  exclusively  the  right  of  transi- 
tion into  the  money  of  each,  at  one  price,  equivalent  to 
871.26  grains  pure  (412.6  grains  nine-tenths  fine)  for  a 


WILLIAM  P.  ST.  JOHK.  418 

dollar.  Thenceforth  the  "  price  of  silver  "  in  Europe 
and  the  United  States  would  be  this  one  mint  price. 
Silver  in  the  lump  then,  as  gold  now»  its  weight  and 
fineness  being  known,  would  be  the  equivalent  of  coin. 
Possessors  of  silver  then  would  not  accept  less  thav 
this  one  mint  price  for  it,  for  the  reason  that  lawful 
money  could  be  had  for  it,  at  this  price,  at  the  mint  i 
and  the  artisan  would  pay  no  more  for  silver  because 
he  could  obtain  it  at  this  mint  price  by  melting  silver 
coin. 

But,  with  the  support  of  mints  withdrawn  from  gold 
and  provided  there  is,  as  some  economists  aver,  a  yearly 
production  of  gold,  neighboring  $25,000,000  more  than 
the  arts,  industries,  and  India  absorb,  the  market  price 
of  gold  would  fall  rapidly  until  the  price  attained  would 
permit  the  lower  arts,  in  utensils  and  the  like,  to  absorb 
the  surplus  gold.  Exactly  this  result  is  evident  in  the 
world's  withdrawal  of  mint  support  from  silver,  but 
much  less  rapidly  attained. 

Next,  imagine  all  these  mints  of  Europe  and  the 
United  States  to  grant  alike  to  gold  and  silver  the  right 
of  transition  into  their  money  at  the  will  of  the  pos- 
sessor, at  one  price  for  gold,  equivalent  to  23.22  grains 
for  a  dollar ;  and  at  one  price  for  silver,  equivalent  to 
871.25  grains  for  a  dollar,  all  the  coins  resulting  to  be 
unlimited  legal  tender  within  the  territory  of  the  na- 
tion coining  them.  If  gold  is  produced  each  year  more 
than  the  arts,  industries,  and  India  absorb,  the  one  only 
use  for  the  surplus  is  employment  as  money.  If  there 
were  silver  produced  each  year  other  than  is  likewise 
absorbed,  and  no  one  doubts  it,  the  only  use  for  such 
surplus  silver  would  be  employment  asmone3\  Hence, 
for  so  long  as  there  continued  to  be  any  surplus  of  goM 


414  SILVEB  AKD  60IJ>. 

and  any  sarplns  of  silver  over  the  said  art  absorption 
of  eacli,  and  provided  the  sarplos  of  neither  metal  were 
sufficient  alene  for  the  worid's  entire  need  of  money, 
for  so  long  the  mint  price  and  market  price  would  be 
one  for  gold,  and  the  mint  price  and  market  price  would 
be  one  for  silver.  Which  would  mean  that  the  one 
mint  price  for  gold  and  the  one  mint  price  for  silver 
would  be  the  universal  market  price  for  each;  and 
would  mean  nniversal  parity  of  the  gold  and  silver  coins 
at  the  ratio  established  by  these  mints. 

Tliis  is  bimetallism  by  a  concert  of  laws.  It  does 
not  seem  akin  to  the  attempts  which  our  ^^  goldites " 
would  thrust  upon  us ;  as,  for  instance,  the  setting  up 
of  a  universal  price  for  each  of  all  commodities,  or  for 
any  one  of  them  so  abundant  everywhere  as  iron. 

Among  other  *^ silver  lunatics'"  sanctioning  the  con- 
fidence  that  bimetallism  thus  attempted  could  not  fail, 
are  the  learned,  professors  of  political  economy  in  the 
colleges  of  London,  Oxford,  Cambridge,  and  Edinburg, 
and  the  late  De  Laveleye  with  others  of  the  profession 
on  the  continent,  and  a  host  of  men  of  other  callings 
eminent  throughout  Europe  and  in  the  United  States. 

The  aforesaid  self-same  tutor,  to  the  contrary  not" 
withstanding,  the  abandonment  of  silver  and  substitu- 
tion of  gold  alone  as  the  primary  money  of  unlimited 
coinage  is  not  the  *^  natural  selection  of  commerce,*' but 
the  ignorant  or  vicious  achievement  of  statecraft. 

The  subjects  of  England  were  deprived  of  their  right 
to  convert  silver  into  money — temporarily  first  in  1798 
and  finally  in  1816 — under  conditions  of  little  public 
concern,  for  the  reason  that  irredeemable  bank  notes 
were  England's  full  substitute  for  money.  Pre- 
cisely   similarly    the    people    of   the   United   States 


THOMAS  B.    KEKI), 


'  i' 


WILLIAM  P.   ST.  JOHN.  417 

were  deprived  of  their  right  to  convert  silver  into 
money,  a  right  enjoyed  for  eighty  years,  while  irredeem- 
able paper  of  sundry  kinds  and  excessive  volume  sup- 
planted gold  and  silver  money  in  the  United  States. 

[Extract  of  note  of  Sir  David  Barbour  (British  finance 
secretary  to  India)  October  20,  1887.] 

*'  In  no  portion  of  Lord  Liverpool's  '  Treatise  on  the 
coins  of  the  realm '  is  there  any  allusion  to :  (1)  The 
treasury  order  of  25th  October,  1697,  directing  that 
guineas  should  be  taken  at  22$.  each  ;  (2)  the  council 
order  of  8th  September,  1698,  referring  the  question  of 
the  high  rate  of  the  guinea  to  the  council  of  trade ;  (8) 
the  report  of  the  council  of  trade,  dated  22(1  September, 
1698 ;  (4)  the  resolution  of  the  House  of  Commons  on 
that  report;  (6)  the  orders  of  the  treasury  to  receive 
the  guineas  on  public  account  at  21«.  6i.  each,  *and 
not  otherwise.' 

'*  With  the  publication  of  these  documents  falls  Lord 
Liverpool's  statement  that  the  English  people,  by  gen- 
eral consent  and  without  any  interposition  of  public 
authority,  attached  a  higher  value  to  the  guinea  after 
the  great  recoinage  than  the  market  value  would 
justify ;  and  with  the  fall  of  the  alleged  fact  must  dis- 
appear the  conclusion  drawn  from  it,  namely,  that  with 
the  increase  of  wealth  and  commerce  the  English 
people  in  1698  had  come  to  prefer  gold  to  silver.  And 
with  the  disappearance  of  this  hypothesis  there  disap- 
pears the  only  evidence  brought  forward  in  support  of 
the  theory  regarding  the  progress  of  wealthy  countries 
from  silver  to  gold,  which  Lord  Liverpool  invented  in 
order  to  overthrow  Locke's  opinion  that  ^goldisnot 
the  money  of  the  world,  or  measure  of  commerce,  nor 
fit  to  be  so.' 

"Lord  Liverpool's  theory  may,  of  course,  be  sound, 
though  the  facts  on  which  he  relied  in  1805  were  im- 
aginary ;  on  the  other  hand,  it  may  fairly  be  said  that 
it  was  the  acceptance  of  the  theory  on  the  authority 


418  SILVER   A^^D   GOLD. 

of  Lord  Liverpool  which  brought  about  in  the  nine- 
teenth century  that  state  of  afiFairs  which  is  now  held 
to  prove  the  soundness  of  the  theory.     *     *     * 

"  How  Lord  Liverpool,  or  those  who  acted  under  his 
orders,  came  to  overlook  the  existence  of  the  documents 
which  I  have  quoted,  and  which  at  that  time  would 
have  destroyed  the  basis  of  his  argument,  is  unaccount- 
able." 


But  if  any  attempt  of  ours  to  achieve  bimetallism 
independently  is  to  yield  silver  as  our  only  money,  my 
conviction  is  the  conviction  of  Robert  Morris,  namely, 
that  silver  is  preferable  to  gold  if  either  is  to  be  the 
only  current  money  of  the  United  States.  The  pres- 
ent Secretary  of  the  Treasury  of  the  United  States  and 
his  associates  of  the  President's  Cabinet  have  lately 
shared  a  well-advertised  effort  to  heap  posthumous 
honors  on  Robert  Morris. 

The  repeal  of  our  "  Sherman  Act,"  November  1, 
1893,  following  the  closing  of  India's  mints  in  June 
against  the  further  coining  of  silver  on  private  account, 
severed  the  last  link  that  coupled  silver  to  its  crippled 
right  of  transition  into  the  money  of  the  Western 
world.  Hence,  just  thirteen  months  ago,  for  the  first 
time  in  history,  the  commercial  world  began  a  free  con- 
cert of  absolutely  blind  experiment  in  money. 

The  latest  estimates  of  Soetbeer,  in  his  almost  post- 
humous publication  of  1892,  accorded  little,  if  any,  new 
gold  from  the  mines  each  year  to  the  world's  increase 
of  money.  Now  observe  that  while  the  population  of 
the  United  States  enlarges  at  a  rate  equivalent  to  add- 
ing the  population  of  Mexico  to  ours  within  seven 
years,  or  of  adding  the  population  of  Canada  and  all 
other  British  possessions  in  North  America  within  three 


WILLIAM  P.  ST.  JOHN.  419 

y^mi^^  this  absolutely  blind  experiment  which  the 
Unite<X  States  shares  demands  that  whoever  would  in- 
crease the  world's  aggregate  of  money  by  the  equiva- 
lent of  fl,000  must  provide  4.03  pounds  Troy  of 
gold. 

Within  Ihe  last  half  of  the  brief  period  succeeding 
1873,  10  cents  a  pound  was  a  sentimental  price  for  cot- 
ton and  "  dollar  wheat "  was  a  sentimental  term.  Re- 
cently, 5  cents  a  pound  in  towns  and  4|  cents  on  the 
plantation,  50  cents  a  pound  and  "  hog  feed  "  on  the 
farm  were  prices  current.  The  dollar  of  the  United 
States,  half  an  inch  in  width  and  a  thirty-second  thick, 
is  thus  become  $2  with  which  to  buy  the  sweat  and  toil 
and  anxieties  of  a  season,  at  the  very  head  and  font  ol 
prosperity  in  the  United  States.  While  thus  the  dollai 
of  the  United  States  is  worth  2  bushels  of  wheat  or  20 
pounds  of  cotton,  it  gauges  the  prosperity  of  the 
United  States  at  IJ  cents  a  year,  if  invested  for  the 
period  of  sixty  days  in  strictly  prime  commercial  paper 
of  New  York. 

The  flood  of  our  prosperity  cannot  rise  higher  than 
its  source.  The  font  is  where  the  nourished  earth 
yields  her  own  increase  and  for  toil  returns  a  hundred- 
fold. It  follows  that  the  conditions  comtemplated 
must  alter  presently,  or  the  want  of  a  traveling  public 
and  the  lack  of  suflBciently  liberal  movements  of  freight, 
at  profitable  rates,  will  shrink  the  earnings  of  certain  of 
our  main  trunk  lines  of  railway  into  a  deficiency  of  any 
dividends  and,  latter,  into  default  of  interest  on  their 
bonds.  Unless  relief  of  law  ensues  without  delay, 
choice  parcels  of  real  estate  in  New  York  city  will 
manifest  declines  in  prices,  exceeding  20  per  cent.,  be- 
tween sales  in  January,  1893,  and  December,  1896. 


420  8ILVEB  AND  GOLD. 

I  am  well  aware  that  moderate  demand  upon  liberal 
supplies  of  commodities  produced  at  low  cost  and  dis- 
tributed cheaply  will  yield  low  prices.  On  these  terms, 
low  prices  stimulate  moderate  demand  into  a  liberal 
demand  upon  the  same  supplies,  and  so  tend  to  recover 
prices.  On  this  basis  low  prices  of  our  staple  necessi- 
ties  are  desirable.  In  such  variations  of  demand  re- 
lative to  such  supplies,  the  producer  may  gather  amid 
the  fluctuation  of  prices,  his  fair  share  of  the  advan- 
tages conferred  on  all  by  his  abundance. 

But,  for  the  reason  that  the  producer  does  not  share 
the  general  advantage  of  the  abundance  of  his  supplies, 
the  United  States  at  large  is  sufferer.  Relief  must  be 
provided,  and  for  that  achievement  we  propose  that,  at 
all  hazards,  the  United  States  sha.U  abandon  experi- 
ment. 

We  ask  the  congress  now  sitting  to  restore  our 
Hamilton-Jefferson  coinage  system,  founded  with  the 
mint,  maintained  for  eighty  years  without  complaint, 
and  overthrown  uuobservedly  at  a  time  when  neither 
gold  nor  silver  was  our  current  money. 

On  December  6,  I  submitted  to  the  Chamber  of  Com- 
merce a  developed  plan  to  restore,  or  attempt,  bimet- 
allism independently,  the  plan  providing  the  modern 
convenience  of  paper  substitutes  for  coin  and  provid- 
ing ample  means  to  stifle  any  possible  money  panic  aris- 
ing with  the  enactment.  No  moment  could  be  more 
propitious  than  the  present  for  any  such  attempt.  Idle 
accumulations  of  money  in  our  important  money  cen- 
ters, like  the  present,  are  rare. 

Our  *'  goldites  "  antagonize  every  such  proposal  with 
two  objections,  to  wit : 

(1)  That  such  legislation  is  superfluous  because  '*  if 


WILLIAM  P.   ST.  JOHN.  42l 

there  is  not  gold  enough  for  all,  there  is  gold  enough 
for  us.  *  *  *  We  can  command  gold  in  competi- 
tion with  all  the  nations.  *  »  *  The  United  States 
is  the  largest  and  best  source  of  supply  of  the  commod- 
ities that  the  world  most  needs — cotton,  wheat,  pro- 
visions, petroleum,  and  the  like." 

(2)  That  to  reopen  our  mints  to  silver  without  limit 
while  offering  coinage  to  gold  without  limit  will  merely 
substitute  silver  monometallism  for  gold  monometallism 
in  the  United  States.  They  mean  that  the  proposed 
enactment  will  yield  silver  dollars  and  paper  redeem- 
able in  silver  dollars  as  our  only  money,  and  for  the 
reason  that  it  will  banish  gold  money  and  expel  it  from 
the  United  States. 

We  adopt,  for  argument's  sake,  both  of  their  predic* 
tions  as  the  assurance  of  our  safety  in  making  the  at- 
tempt. 

Our  ability  to  command  gold  in  competition  with  na- 
tions striving  for  the  meager  supply  of  gold  available  to 
money  would  depend  upon  the  further  sacrifice  of  our 
producers  of  petroleum,  provisions,  wheat,  cotton,  and 
the  like.  Lower  and  lower  prices  for  these  elementary 
essentials  of  our  prosperity  must  pursue  a  foreign 
market,  and  every  drain  of  Europe's  gold  to  us  as  our 
return  for  them  would  further  lower  Europe's  prices 
for  all  commodities,  including  any  more  of  these  she 
buys. 

By  our  proposal,  on  the  contrary,  the  United  States 
provides  itself  the  convenient  ability  to  part  with  gold 
composedly.  Instead  of  our  present  restriction  to  gold 
alone  as  our  tremulous  necessity,  we  propose  to  be  able 
to  loan  our  gold  to  Europe  for  our  own  sakes,  selfishly. 
Ifi  aa  our  Mint  Director  estimates,  we  have  1600,000^* 


422  SILVEB  AND  GOLD. 

000  of  gold  and  #20,000,000  annuallj  produced  in  ex- 
cess  of  oar  needs  in  the  arts  aud  industries,  to  spare  a 
liberal  portion  to  Europe,  having  a  convenient  abun- 
dance of  domestic  money  at  home,  is  to  loan  Europe  the 
vehicle  with  which  to  carry  our  prosperity.  To  in- 
crease thereby  Europe's  aggregate  of  money  is  to  raise 
normal  prices  of  all  commodities  in  Europe,  including 
those  for  which  the  United  States  is  Europe's  best 
source  of  supply.  Therefore,  diametrically  the  op- 
posite in  achievement  to  what  our  ^^goldites"  urge,  we 
would  enlarge  Europe's  demand  for  our  surplus  petro- 
leum, provisions,  cotton,  and  wheat,  and  upon  a  higher 
plane  of  prices  for  them  as  she  buys. 

Imagine,  as  the  immediate  achievement  of  our  pro- 
posed enactment  silver  dollars  and  paper  redeemable  in 
silver  dollars  to  be  the  only  money  of  the  United  States. 
The  tendency  first  evident  will  be  its  restriction  of  our 
importations  of  European  products.  This  is  evident 
under  India's  silver  monometallism  in  her  relation  to 
the  outside  world.  But  a  home  expeiience  may  be  re- 
called : 

During  the  period  of  plethoric  State  bank  notes  in 
the  United  States,  when  a  New  York  merchant  had 
sold  to  western  and  southern  merchants  and  bills  were 
due,  his  collector  obtaining  local  bank  notes  in  a  west- 
ern city  would  invest  in  grain  or  flour,  in  a  southern 
city  would  invest  in  cotton.  Shipping  the  flour  and 
cotton  to  New  York,  the  sales  would  realize  New  York 
bank  notes.  The  operation  was  thus  equivalent  to 
shipping  New  York  bank  notes  from  the  western  or 
southern  cities  to  New  York.  The  like  operation  be- 
tween the  United  States  and  Europe  for  our  interna- 
tional trade  settlements  would  take  the  place  of  gold 


WILLIAM.  P.   BT.   JOHN.  428 

ihipments,  if  gold  were  hoarded  for  a  high  premium,  as 
feared.  Each  KaAi  operation  would  swell  the  volume 
of  our  exports  Df  commodities  and  benefit,  primarily, 
those  for  wi^om  we  must  be  most  concerned,  our  pro- 
ducers. 

But  the  likelihood  of  any  need  of  such  an'operation 
as  a  par<  of  the  contemplation  of  the  New  York  mer- 
chant m  selling  to  the  west  and  south  tended  to  make 
him  Midisposed  to  sell  there.  To  such  extent  the  soutli- 
ez-Ti  and  western  importations  from  New  York  were 
lessened.  To  the  like  extent  our  foreign  importations 
will  be  lessened  under  our  silver  money  regime,  to  the 
advantage  of  our  home  manufacturers  as  against  the 
foreign  manufacturers  all  the  time.  But  in  our  ex- 
perience, when  the  New  York  merchant  or  manufacr 
turer  found  his  home  market  not  broad  enough  for  all 
his  wares,  as  was  frequently  the  case,  his  surplus  was 
sold  west  and  south  at  as  low  price  and  sometimes  even 
lower  prices  than  to  customers  at  home.  The  home 
market  price,  being  for  the  greater  portion  of  their  mer- 
chandise was  maintained,  at  a  sacrifice  of  profit  on  the 
moderate  surplus  sold  elsewhere.  Similarly  Manches- 
ter, Lyons,  and  German  manufacturers  would  exper- 
ience the  restriction  of  our  silver  itioney  upon  them. 
Our  importations  of  Europe's  products  are  to  some  ex- 
tent a  surplus  which  she  must  sell.  To  that  extent  our 
importations  of  foreign  products  will  continue  to  for- 
eign disadvantage  and  our  gain. 

But,  because  we  are  Europe's  "  best  source  of  supply  " 
for  our  great  surplus  of  staple  commodities,  Europe  will 
buy  of  us,  even  though  we  do  not  buy  of  her.  As,  for 
instance,  we  buy  from  Cuba  $75,000,000  worth  of  goods 
a  year  and  sell  to  Cuba  $12,000,000  to $25,000,000 only; 


424  SILVER  AND  GOLD. 

or  as  Brazil  finds  a  market  here  for  $70,000,000  of  her 
commodities  and  buys  $40,000,000  only  of  our  commod- 
ities in  return ;  and  finally  as  England,  on  the  con- 
trary, is  debtor  to  the  United  States  for  an  excess  of 
$100,000,000  a  year  by  average  in  our  mutual  barter  of 
commodities  with  her. 

Therefore,  with  our  silver  money  restriction  upon  im- 
portations setting  all  our  spindles  turning,  employing 
operatives  at  full  time  and  these  operatives  made 
thereby  to  enlarge  our  aggregate  of  home  consumers  of 
all  home  products ;  with  our  trade  settlements  in  mer- 
chandise serving  to  enlarge  the  exportations  of  our 
spare  products ;  with  Europe's  prices  for  our  products 
enchanced  by  our  enlargement  of  Europe's  aggregate  of 
money,  our  achievement  next  evident  will  be  a  credit 
balance  of  trade  established  in  Europe  for  the  merchants 
of  the  United  States.  At  that  point  exchange  on  Lon- 
don would  sell  in  Wall  street  at  a  discount.  This 
means  a  drift  on  gold  payable  seven  days  from  date 
offered  at  a  discount  in  standard  silver  dollars — ^the  de- 
spised, stigmatized  50-cent  silver  piece  in  Wall  street, 
held  at  a  premium  over  gold  in  London.  It  means  our 
silver  dollars  and  our  gold  coin  at  par — bimetallism  a 
reality  in  the  United  States.  Our  prosperity  as  her  ex- 
ample, and  to  such  a  degree  at  her  expense,  is  likely  to 
enforce  the  influence  of  Manchester's  opinion  of  Eng- 
lish monometallism,  the  result  of  which  may  mean  the 
abandonment  of  her  vicious  monetary  system  by  En- 
gland. 

Europe's  only  silver  is  her  money.  Europe's  silver 
coin  is  valued  from  8.06  cents  to  over  13.33  cents  per 
dollar  more  than  ours.  Her  '^silver  pots  and  spoons  " 
carry  the  additional  price  of  labor  in  them.    She  will 


WILLIAM  P.   ST.  JOHN.  426 

Bhip  US  gold,  therefore,  rather  than  silver,  at  a  minimum 
preference  of  3  per  cent. 

Our  "  goldites"  would  dismiss  all  this  on  the  ground 
of  an  over- abundance  of  silver.  Had  the  most  influen- 
tial doctrinaire  in  money  in  Europe  been  as  influential 
with  lawmakers  in  1853  as  our  aforesaid  tutor  was  in- 
fluential with  law  dictatoi-s  in  1898  France  would  have 
closed  her  mints  to  gold.  Silver  monometallism  would 
have  been  the  coinage  system  of  the  world.  Chevalier 
threatened  France  with  an  abundance  of  gold  as  cheap 
and  overwhelming  as  iron.  Silver  is  the  over-abundant 
prediction  of  our  influential  doctrinaires.  Note,  how- 
ever,  that  $5,000,000  worth  of  silver  bullion  is  at  this 
moment  an  overestimate  for  the  world's  distributing 
markets'  supplies  of  silver. 

Finally,  our  "goldites,"  and  in  particular  our  tutor 
aforesaid,  distort  history  for  proof  that  bimetallism  is  a 
failure ;  and  that  independent  bimetallism  in  the  United 
States  during  eighty  years  furnished  the  experience  for 
the  certainty  of  failure  if  attempted  now.  The  facts, 
justly  handled,  refute  both  assertions  flatly. 

The  world's  great  mints  were  never  open  to  gold  and 
silver  without  limit  on  a  single  price  among  them  for 
each  metal.  In  consequence  every  seeming  divergence 
between  a  market  price  and  a  mint  price  for  either 
metal  was  invariably  a  difference  between  mint  prices. 
Divergence  between  one  mint  price  and  another,  or 
other  mint  prices,  has  to  answer  in  history  for  every 
annoying  flight  of  gold  or  of  silver  internationally.  By 
undervaluing  gold  relative  to  silver,  compared  with  the 
French  mint's  valuation  of  gold  relative  to  silver,  our 
coinage  act  of  1792  caused  our  merchants  to  choose  gold 
preferably  to  silver  for  their  foreign  settlements,  follow* 


426  SILVEE  AND  GOLD. 

ing  1792.  By  undervaluing  silver  relative  to  gold,  com- 
pared with  the  French  mint's  relative  valuation  of  the 
two,  in  our  coinage  act  of  1834  we  made  our  merchants 
choose  silver  preferably  to  gold  for  foreign  settlements 
thereafter.  This  divergence  between  mint  prices — not 
divergence  between  our  mint  price  and  any  market 
price — cost  us  gold  in  one  period  and  cost  us  silver  in 
the  other,  for  the  reason  only  that  during  most  of  both 
periods  we  were  usually  the  debtors  in  balancing  our 
foreign  trade. 

Our  ^' goldite '*  assertion  that  our  said  act  of  1792 
effectually  demonetized  gold  by  expelling  it  from  the 
country,  and  that  our  act  of  1884  effectually  demone- 
tized silver  by  expelling  it,  are  alike  refuted  by  indis- 
putable records,  not  made  for  argument,  but  reporting 
facts.  Thus  for  the  twelve  years  ending  1805  our  gold 
coinage  exceeded  our  silver  coinage.  In  the  eighteen 
years  following  our  gold  coinage  was  half  our  silver 
coinage*  In  the  nine  years  ending  1838  our  gold  coin- 
age was  one-fourth  our  silver  coinage.  And  in  this 
same  period  of  "  banished  gold  **  (?)  our  trade  move- 
ments of  both  metals  were  usually  in  one  direction, 
usually  export  in  excess  of  import  of  both  until  ending 
1823.  In  1824  the  net  movement  of  the  two  was  im- 
port in  excess  of  export ;  1825  refutes  this  gold-banish- 
ing theory  flatly  by  a  net  import  of  gold  and  a  net  ex- 
port of  silver.  In  the  five  years  following,  both  metals 
moved  together  again,  import  in  excess  of  export.  In 
1831  our  ^^goldites  "  are  again  refuted  flatly  by  the  net 
import  of  gold  with  a  net  export  of  silver.  Thereafter 
gold  and  silver  both  show  import  in  excess  of  export 
until  1884. 

And  in  the  period  following  1884,  while  **  baniflhed 


WILLIAM  P.   ST.  JOHN.  427 

Bilver"  (?)  is  the  assumption  of  our  **  goldites,"  our 
silver  coinage  in  the  first  eight  years  equaled  our  silver 
coinage  of  the  eight  years  prior.  Our  silver  coinage  in 
these  first  eight  years  exceeded  by  18,000,000  our  coin- 
age of  gold.  Ill  the  second  eight  years  ending  1850  we 
coined  $18,000,000  of  silver,  although  we  were  not  pro- 
ducing silver,  but  were  producing  gold  in  amounts 
more  vast  than  the  world  had  known.  And  in  the  first 
four  years  of  this  "  silver  banished  "  (?)  period  our  im- 
ports of  silver  exceeded  our  exports  of  silver  by  $6,- 
000,000  more  than  our  imports  exceeded  our  exports  of 
gold.  For  the  three  years  ending  1842  the  net  move- 
ment of  both  metHls  was  together,  export  in  excess  of 
import.  And  nine  years  after  this  act  of  1834  our  net 
movement  was  import  in  excess  of  export  for  gold  and 
silver  both.  Our  "  goldites  "  are  refuted  notably  and 
finally  in  the  fact  that  prior  to  our  civil  war  no  really 
important  movement  of  the  one  metal  inward  and  the 
other  metal  outward  is  the  record  of  any  year. 

And  note  also  in  this  connection  and  at  this  particular 
moment,  besides  the  considerable  sum  in  coins  of  for- 
eign nations,  circulating  as  our  legal  tender  until  1857, 
and  besides  the  unlimited  legal  tender  functions  of  half 
dollars,  quarters,  and  dimes  until  1853,  and  besides  the 
fact  that  80  per  cent,  of  all  the  silver  dollars  coined 
were  coined  after  1834,  this  fact,  namely,  that  redun- 
dant bank  notes  which  increased  by  more  than  $200,000,- 
000  in  a  period  of  ten  years,  were  tending  all  the  time 
to  house  both  gold  and  silver  in  quiet  bank  reserves. 

Finally,  I  regret  profoundly  that  space  forbids  the 
details  of  independent  bimetallism  in  France  and  the 
record  of  her  mint  dictation  of  the  world's  market  price 
for  gold  and  silver  during  a  period  of  seventy  yearst 


428 


Sn^VER   AND  GOLD. 


On  the  closing  of  her  mints  against  silver  in  1874 
France  had  $900,000,000  of  gold  and  $700,000,000  of 
silver  circulating  side  by  side  as  money.  Her  popula- 
tion barely  exceeded  86,000,000.  Our  present  popula- 
tion exceeds  65,000,000,  with  a  promise  of  exceeding 
the  aggregate  population  of  Great  Britain  and  France 
within  ten  years ;  and  our  use  for  gold  and  silver  is  for 
a  circulation  over  a  territory  seventeen  times  tha  area 
of  France. 


X.  8.  LACEY.  429 


CHAPTER  XXIV. 

1   SYSTEM    OF    0UBBEKG7 — BT    E.  S.  LACET,  EX-IT.  S. 

GOHPTBOLLEB. 

The  prosperity  of  the  people  of  this  country  can 
never  rest  upon  a  solid  foundation  until  the  questions 
relating  to  coinage  and  currency  are  settled  perma- 
nently and  settled  correctly.  Money  is  the  life-blood 
of  the  commercial  body,  and  the  latter  cannot  enjoy 
sound  health  unless  the  former  meets  all  just  require- 
ments as  to  quantity,  quality  and  activity. 

Primary  money  constitutes  the  standard  and  meas- 
ure of  value,  and  must  consist  of  gold,  or  silver,  or 
gold  and  silver  combined.  Our  present  standard  is 
gold.  CouRidered  in  the  light  of  either  history  or 
science,  it  seems  quite  impossible,  under  present  condi- 
tions, for  the  United  States  to  undertake  the  free  and 
unlin/\ted  coinage  of  full  legal  tender  silver  without 
its  rpisulting  in  the  expulsion  of  gold,  and  the  adoption 
of  silver  as  the  sole  standard  and  measure  of  value. 
The  condition  of  the  countries  now  using  the  silver 
standard  is  not  one  of  prosperity.  Mexico,  the  states 
of  South  and  Central  America,  and  the  nations  of  Asia 
are  the  countries  now  in  this  category.  The  unhappy 
condition  of  the  producers  in  these  countries,  and  tlie 
low  state  of  civilization  prevailing,  form  parts  of  a  pic- 
ture which  cannot  be  inviting  to  the  citizens  of  the 
United  States.  All  the  great  commercial  nations  of 
Europe  long  ago  adopted  the  gold  standard.    While 


1 

I 


430  SILYEB  AND  GOLD. 

depression  has  characterized  the  business  activities  of 
all  countries  during  the  past  two  years,  it  is  apparent 
that  the  condition  of  the  people  iu  the  silver  standaid 
countries  is  by  far  the  most  deplorable.  It  seems  de- 
monstrable that  our  condition  under  a  silver  standard 
would  be  far  from  satisfactory,  but  the  period  of  transi- 
tion from  gold  to  silver  as  standard  money  would  un- 
doubtedly be  the  most  disastrous  known  to  any  people. 

It  is  of  great  importance  that  the  battle  of  the 
standards  now  in  progress  should  be  waged  until  a  de- 
cisive victory  shall  establish  the  right,  for  uncertainty 
is  fatal  to  every  interest ;  but  whatever  may  be  the  de- 
cision as  to  primary  money,  it  is  clear  that  radical  re- 
form as  to  our  credit  money  is  an  absolute  necessity. 
It  is  imperative  that  we  immediately  proceed  to  supply 
the  people  with  credit  money  as  a  medium  of  exchange 
amply  secured,  promptly  redeemable  in  coin,  and  auto- 
matically conforming  in  volume  to  the  necessities  of 
business.  To  this  end,  the  following  propositions  are 
submitted : 

1st.  All  gold  coins  and  notes  (except  silver  certifi- 
cates) of  a  lower  denomination  than  ten  dollars  to  be 
retired  and  reissued  in  notes  of  ten  dollars  and  multi- 
ples thereof. 

2d.  All  silver  certificates  of  a  higher  denomination 
than  five  dollars  to  be  retired,  and  reissued  in  denom- 
inations of  one,  two  and  five  dollars. 

8d.  The  United  States  legal  tender  notes  and  the 
treasury  notes  of  1890  to  be  funded  into  U.  S.  8  per 
cent.  50  year  bonds,  the  government  reserving  the 
right  to  call  and  pay,  at  the  end  of  any  fiscal  year, 
bonds  equal  in  amount  to  the  surplus  revenue  for  that 
period,  the  bonds  so  paid  to  be  selected  by  lot. 


B.  8.  ltA.crAl  4S1 

4th.  National  banks  to  issue  notes  to  the  par  of 
United  States  bonds  deposited  to  secure  circulation, 
and  pay  an  annual  tax  of  one-fourth  of  one  per  cent, 
upon  said  notes. 

6th.  A  redemption  fund  equal  to  10  per  cent,  of  said 
note  issues,  to  be  msiintained  by  said  bunks  in  the 
United  States  Treasury  for  the  purpose  of  redeeming 
said  notes  at  the  ofiBce  of  every  assistant  treasurer  of 
the  United  States. 

6th.  One-third  of  that  part  of  the  lawful  money  re- 
quired to  be  held  by  national  banks  ia  their  own  vaults 
may  consist  of  the  notes  of  other  national  banks. 

The  first  two  propositions  submitted  are  designed  to 
prevent  the  payment  of  custom  duties  in  silver  certifi- 
cates or  anything  besides  gold.  If  the  government  is 
to  meet  its  obligations  in  gold,  all  taxes  and  duties 
should  be  paid  in  gold  or  its  equivalent.  In  order  to 
accomplish  this,  we  must  use  silver  and  silver  certifi- 
cates as  domestic  money.  That  is  the  use  to  which 
silver  is  perfectly  adapted,  and  it  is  important  that  this 
sphere  of  activity  be  reserved  therefor.  There  is  in 
circulation  in  the  United  States  in  gold  coins,  and  in 
paper  notes  below  the  denomination  of  ten  dollars,  be- 
tween three  and  four  hundred  millions  of  dollars.  If 
these  were  retired,  and  silver  certificates  were  issued 
only  in  denominations  of  one,  two  and  five  dollars, 
silver  and  silver  certificates  which  have  heretofore 
caused  us  so  much  uneasiness  would  be  absorbed  in  the 
daily  transactions  of  life ;  they  would  be  found  in  the 
pockets  of  the  people,  in  the  till  of  the  tit^desman,  and 
not  in  the  banks  and  custom  houses  of  the  country. 
And  so  the  first  two  propositions  look  to  the  utilizing 
of  silver,  within  its  proper  sphere. 


432  SILVER  AND  GOLD. 

The  third  proposition  is  to  fund  the  legal  tender 
notes,  and  the  notes  of  1890,  into  long  8  per  cent, 
bonds,  for  the  purpose  of  getting  the  government  out 
of  the  business  of  issuing  circulating  notes,  so  that  the 
legal  tender  notes  and  the  notes  of  1890  cannot  be 
utilized  for  the  purpose  of  exhausting  the  treasury  oi 
its  gold  supply.  We  have  seen  this  process  repeated 
time  and  again,  forcing  the  government  to  issue  bonds 
in  order  to  provide  a  fund  from  which  to  redeem  this 
endless  chain  of  legal  tender  notes. 

Tlie  fourth  proposition  is  to  allow  national  banks  to 
issue  notes  to  the  par  of  United  States  bonds  deposited 
to  secure  circulation.  This  makes  the  issue  of  notes 
perfectly  secure,  and  there  is  no  sound  argument 
against  it. 

Proposition  No.  5  provides  for  increasing  the  bank 
note  redemption  fund  to  ten  per  cent ,  and  that  bank 
notes  shall  be  redeemed  at  the  office  of  every  assistant 
treasurer  in  the  United  States.  Under  the  existing 
system,  the  notes  issued  by  a  national  bank  are  seldom 
or  never  presented  at  its  counter  for  redemption,  and 
so  far  as  the  redemption  at  Washington  is  concerned, 
at  leaftt  four-fifths  of  the  notes  redeemed  are  unfit  for 
circulation,  so  that  it  really  amounts  to  nothing  more 
than  the  retirement  of  worn-out  notes.  This  plan  is 
wholly  inadequate.  Redemption  should  proceed  from 
day  to  day  precisely  as  does  the  redemption  of  drafts 
and  checks.  There  should  be  an  active,  every-day  re- 
demption of  these  notes  in  every  prominent  city,  in 
order  that  the  volume  may  increase  or  diminish  so  as 
to  conform  to  the  necessities  of  the  business  of  the 
country.  It  would  be  a  hardship  for  national  banks  to 
maintain  a  fund  in  every  reserve  city  in  the  United 


WII.T.IAM  McKINI.KY. 


E.  8.   LACEY.  486 

States  for  the  purpose  of  redeemiDg  their  notes.  If 
we  increase  the  deposit  of  the  banks  with  the  United 
States  government  to  10  per  cent.,  or,  if  necessary^  to 
15  per  cent,  of  their  circulation,  and  provide  for  the 
redemption  of  their  notes  at  every  United  States 
Assistant  Treasurer's  oflSce,  our  system  would  corre- 
spond in  some  degree  with  the  redemption  of  the  notes 
of  the  Canadian  banks.  The  last  named  institutions 
maintain  branches  in  the  leading  cities  of  the  Domin- 
ion, and  their  notes  are  daily  redeemed  at  all  these 

■ 

points- 
Such  a  system  of  redemption  would  produce  the 
elasticity  absolutely  essential  in  credit  money.  It  is 
impossible  to  have  a  greater  or  less  volume  of  checks 
and  drafts  than  business  requires,  and  under  proper 
methods  of  redemption,  this  would  be  equally  true  of 
bank  notes. 

The  last  proposition,  that  one-third  of  that  part  of 
the  lawful  reserve  required  to  be  held  in  the  vaults  of 
the  banks  may  consist  of  the  notes  of  other  banks, 
grows  out  of  the  necessities  of  the  case.  If  we  fund 
all  the  legal  tender  notes  and  the  notes  of  1890,  noth- 
ing would  be  available  for  the  reserve  of  national 
banks  except  gold,  silver  and  silver  certificates.  Hence, 
as  silver  would  be  employed  as  domestic  money,  there 
might  be  a  deficiency  in  the  money  available  for  bank 
reserves.  I  can  see  no  serious  objection  to  counting, 
as  a  part  of  the  reserve  (to  the  extent  of  one-third  at 
least),  the  notes  of  solvent  banks,  secured  as  those 
notes  will  be  in  the  plan  proposed.  This  will  not  in- 
terfere with  the  proper  redemption  of  bank  notes,  be- 
cause when  the  stock  of  gold  and  bank  notes  at  a  given 
point  is  so  small  that  it  is  only  sufficient  to  supply  the 
25 


486 


SILVER   AND   GOLD. 


bank  reserve,  there  will  be  no  need  of  reducing  the 
volume  of  the  currency  by  redemption.  When  the 
stock  is  in  excess  of  this  amount  then,  of  course,  thc» 
redemption  will  proceed  as  usual,  and  the  necessary 
contraction  will  result. 

In  my  opinion,  this  plan  would  give  us  a  sound  cur- 
rency, well  secured,  redeemable  in  coin  at  all  the  prin- 
cipal cities,  and  so  elastic  as  to  conform  to  the  neces- 
sities of  trade.  Unless  we  can  provide  a  paper  cur- 
rency possessing  all  these  qualities,  a  proper  solution 
of  the  questions  relating  to  the  coinage  of  gold  and 
silver  will  not  bring  us  the  needed  relief,  and  embar- 
rassment and  depression,  panic  and  disaster,  will  peri« 
odica}  ly  afllict  us. 


XiTHAN  J.  GAGE.  487 


CHAPTER  XXV. 

SILVER  AND  THE  BANKS — BY  LYMAN  J.  GAGE,  PBE8- 
IDENT  OF  THE  FIBST  NATIONAL  BANK,  CHICAGO. 

The  silver  question  has  been  long  under  debate. 
The  issues  involved  have  been  afiSrmed,  denied,  and  de- 
clared to  be  unworthy  of  debate.  Events  now  indicate 
that  these  issues,  whether  good,  bad,  or  indifferent, 
must  soon  be  met  and  forever  settled. 

My  objections  to  silver  do  not  lie  in  the  fact  that  the 
silver  standard  is  peculiarly  inimical  to  the  interests  of 
banks.  On  the  contrary,  I  affirm  that  aside  from  the 
benefit  conferred  on  silver  mining  interests,  bankers 
and  money  brokers  are  the  only  classes  likely  to  reap 
advantage  therefrom. 

How  can  this  be  ?  The  answer  is  not  remote.  It  is 
now  generally  admitted  that  what  is  called  a  double 
standard  is  not  a  practical  and  enduring  possibility. 
With  gold  and  silver  both  current,  one  must  be  su- 
perior and  the  other  subordinate.  At  this  hour  such  is 
the  fact  with  us.  Gold  is  the  recognized  money  of  ac- 
counts, and  silver  circulates  in  a  reduced  volume  by 
tlie  sufferance  of  the  commercial  community,  but  in  a 
purely  incidental  and  subordinate  relation.  The  con- 
tinued infiltration  of  silver  coin  and  silver  certificates 
into  the  channels  of  circulation,  supported  and  enforced 
by  the  treasury  department,  threatens  to  soon  reverse 
the  present  relation  of  the  two  metals  in  our  financial 
system.    When  that  shall  be  accomplished,  silveir  will 


488  SILVER  AND  GOLD. 

be  the  money  of  account,  and  our  gold  coin,  possessed, 
as  it  is,  of  a  higher  commercial  value  abroad,  will 
either  be  hoarded  at  home  or  seek  its  higher  exchange- 
ability in  other  countries. 

I  have  said  the  banking  class  would  find  advantages 
in  this  shifting  of  standards.  It  will  occur  in  two  ways 
— first,  through  the  profit  arising  from  exchanging  with 
the  public  the  then  absolute  money,  gold,  for  the  new 
medium,  silver ;  and  second,  with  silver  payments  made 
respectable,  the  banker  will  find  as  good  protection  as 
he  now  enjoys  against  dangerous  runs,  with  much 
lower  average  reserves,  and  the  difference  he  can  lend 
at  a  profit. 

The  bulky  character  of  silver,  also,  will  render  the 
banker*s  service  to  the  public  the  more  indispensable. 
It  is  true  that  the  purchasing  power  of  his  capital, 
when  counted  in  silver,  will  be  much  reduced ;  but  as 
he  is  never  a  buyer — always  a  lender — this  will  not 
consciously  affect  him,  or,  if  it  does,  the  conversion  of 
his  present  gold  reserves,  with  their  accompanying  pre* 
mium,  into  the  lower  silver  standard,  will  nearly  or 
quite  make  good  such  loss. 

Why,  then,  do  I  oppose  a  movement  which  promises 
these  benefits  ?  We  oppose  it,  notwithstanding  these 
temporary  and  unworthy  advantages,  because,  taught 
by  the  nature  of  our  relations  to  reason  on  these  things, 
we  perceive,  or  honestly  think  we  perceive,  that  the 
adoption  of  silver  as  the  money  of  account  will  be  det- 
rimental to  our  commercial  and  industrial  interests,  and 
in  the  prosperity  of  these  the  nation's  highest  welfare 
is  closely  bound. 

How  will  our  industrial  and  commercial  interests  be 
adversely  affected?     We  are  a  commercial  people. 


LTMAN  J.   OAQE.  489 

The  extension  of  our  trade  and  commerce  over  all  seas 
and  with  all  people  is  recognized  as  a  most  desirable 
object.  At  present  the  extent  of  this  trade  and  com- 
merce is  limited.  Older  nations  have  naturally  been  in 
advance  of  ua  in  the  world's  markets,  and  we  are  met 
by  this  embarrassment. 

Another  fact  exists.  It  will  not  be  disputed  that  for 
all  our  commercial  transactions  with  other  people,  set- 
tlement must  be  made  in  the  London  money  market. 
If  we  buy  sugar  in  Cuba,  we  pay  for  it  in  London.  If 
we  sell  goods  in  Brazil,  we  accept  English  funds  there- 
for, payable  in  London.  So  that,  whether  we  buy  or 
sell  in  the  course  of  our  foreign  trade,  London  is  the 
settling  house  for  all  this  trade.  At  the  present  time 
our  financial  system  rests  upon,  and  our  commercial 
values  are  measured  by,  the  same  metallic  standard, 
namely,  gold  coin.  Our  gold  coin  shipped  to  the  Brit- 
ish mint  may  be  coined  into  sovereigns  at  a  nominal 
expense,  and  English  sovereigns  shipped  to  us  may  be 
transmuted  into  our  gold  coins  at  no  material  cost. 
Thus  in  the  competitive  struggle  for  a  place  in  foreign 
markets  we  enjoy  a  great  advantage  in  using  the  same 
metallic  money  standard. 

The  rise  and  fall  of  gold,  or  the  rise  and  fall  of  com- 
modities in  their  relation  to  gold,  affect  us  in  our  great 
competition  in  an  exactly  similar  manner.  We  enter 
the  commercial  contest  with  weapons  equally  matched. 
It  is  now  proposed  voluntarily  to  surrender  this  impor- 
tant position.  With  silver  money  of  the  present 
weight  and  fineness  the  recognized  and  established 
money  account  in  our  domestic  affairs,  we  shall  have 
our  industrial  exchanges  carried  on  under  a  money 
standard  many  points  removed  from  the  settling  house 


440  SILVER  AND  GOLD. 

standard.  Our  domestic  values  will  rise  and  fall  in 
lation  to  an  entirely  different  standard.  Can  anyone 
measure  the  deranging  influence  of  this  fact  upon  our 
foreign  trade  ?  But  this  indirect  and  ambiguous  ad- 
verse influence  is  not  all.  In  every  settlement  abroad, 
we  shall  be  at  the  disadvantage  of  converting  our  do- 
mestic money  of  account,  silver,  into  the  English 
money  of  account,  gold.  And  that  this  will  always  be 
at  a  charge  to  us  is  plain,  if  we  reflect  a  moment. 
Thus,  if  in  settling  balances  abroad  specie  shipments 
are  required,  we  must  send  either  gold  or  silver.  If  we 
shall  send  silver,  it  will  be  converted  at  our  cost  in  the 
English  market  into  their  money  of  account,  gold.  If, 
then,  we  ship  silver,  it  will  disturb  the  previous  equi- 
librium of  the  market  there  and  reduce  the  price.  If 
we  shall  send  gold,  its  purchase  in  our  own  market  will 
disturb  the  previous  equilibrium  of  our  market  and  ad- 
vance its  price,  and  contrariwise,  if  in  the  settlement 
of  balances  we  receive  money  from  abroad,  it  will  be  in 
a  like  measure  against  us. 

If  we  buy  silver  in  the  English  market,  it  must  en- 
hance its  purchase  price.  If  we  bring  gold,  it  will  find 
a  falling  market  here.  Whether  we  pay  or  receive, 
therefore,  there  will  always  be  an  unknown  percentage 
against  us.  Not  only  will  this  be  so  when  actual  bal' 
ances  are  thus  bodily  transferred,  but  also  in  the  ordi- 
nary course  of  settlement  through  the  medium  of  the 
bills  of  exchange,  which  to  a  large  extent  meet  and 
cancel  each  other.  The  influences  just  described  will 
be  taken  into  account  by  the  exchange  dealers,  and  a 
larger  margin  of  profit  than  is  now  required  will  of 
necessity  be  exacted  We  all  know  that  trade  turns 
upon  small  percentages,  and  the  larger  the  transaction 


LYMAN  J.  GAGE.  441 

the  more  influential  is  a  fractional  per  cent.  It  foUowB, 
then,  that  with  silver  the  established  money  of  account 
at  home,  our  foreign  trade  will  be  prejudiced  and  re- 
stricted. It  follows,  also,  that  tliose  who  furnish  prod- 
ucts to  go  abroad  must  furnish  them  at  a  price  some- 
what less,  aud  those  who  consume  products  brouglit 
from  abroad,  must  pay  somewhat  more,  to  make  good 
the  increased  margin  for  cost  and  risk  in  converting 
the  unrelated  standards  of  the  two  countries.  It  will 
give  an  increased  profit  to  dealers  in  foreign  exchange. 
It  will  force  the  importer  to  add  an  extra  per  cent,  tq 
his  selling  price.  It  will  make  the  exporter  deduct  a 
percentage  from  his  purchasing  price.  Who  will  suffer 
therefrom  ?  The  industrial  classes  who  produce  and 
consume  the  exchangeable  products.  Why  should  this 
wrong  be  perpetrated?  Will  it  protect  and  advance 
our  silver  interests  ?  If  so,  it  will  be  a  benefit  to  a  class 
aggregating  in  number  about  one  hundred  thousand. 
Will  it  adversely  affect  the  interests  of  our  agricultural 
and  other  industrial  classes?  If  so,  and  it  is  this  I 
affirm,  it  will  prejudice  the  welfare  of  the  wliole  people, 
for  in  these  two  classes  our  entire  population  is  sub- 
stantially included. 


442  SILVEB  AKD  GOLD. 


CHAPTER  XXVI. 

Why  ufiJimited  Silver  coinage  should  be  restored  at  the 
ratio  fixed  ly  Congress  in  18S7 — Sixteen  to  one  of 
Gold. 

BY  SENATOR  W.   A.  PEFFEB. 

The  "money  question"  covers  a  much  wider  field 
than  is  presented  in  current  discussions  of  the  subject ; 
and  the  "silver  question"  involves  much  more  than  is 
commonly  considered  in  the  ordinary  debates  of  the 
day. 

Silver  coinage  is  desirable  or  necessary,  if  at  all, 
only  because  we  use  gold  for  money  coins  and  there  is 
not  gold  enough  in  the  country  or  the  world  to  supply 
the  reasonable  demands  of  the  people  for  lawful  tender 
money  in  their  daily  business. 

In  order  that  we  may  proceed  understandingly,  let 
us  first  consider 

What  is  Money? 

Without  dwelling  on  a  discussion  of  definitions,  it 
may  be  said,  in  a  general  way,  that  money  is  any  de- 
vice used  by  common  consent  among  men  with  which 
to  efi^ect  their  cash  exchanges  and  to  pay  their  debts 
and  taxes. 

Money  is  n  cessary  only  because  individual  men  and 
women  produce  more  of  some  kinds  of  property  and 
not  as  much  of  some  other  kinds  as  they  need  for  their 


8ENATOA  W.   A.   PKFFER.  443 

own  use,  and  they  desire  to  exchange  their  surplus  for 
what  they  require  of  the  surplus  of  other  producers. 
It  often  happens  that  the  producer  and  the  consumer 
of  an  article  are  far  apart,  and  it  is  therefore  impracti^ 
cable  for  them  to  make  an  exchange  of  the  particular 
articles.  This  is  the  case  with  respect  to  the  Kansas 
farmer  who  raises  wheat,  and  the  planter  of  Brazil, 
who  raises  coffee ;  with  the  manufacturer  of  Chicago 
who  produces  steel  rails,  and  the  farmer  of  China  who 
produces  tea.  Instances  almost  without  number  miglit 
be  cited  to  illustrate  the  proposition.  It  is  mirrored 
daily  on  the  dinner  table  of  any  citizen.  Note  the 
things  resting  there — the  viands  of  many  kinds — 
where  were  they  produced?  The  vegetables  and  fruits 
represent  regions  far  apart ;  the  potatoes  from  Colorado, 
celery  from  Michigan,  cranberries  from  Wisconsin,  and 
strawberries  from  Florida.  Bread  made  from  California 
wheat,  rice  grown  in  South  Carolina,  beef  produced  in 
Wyoming,  and  mutton  in  Ohio.  The  porcelain  and 
glassware,  and  the  cutlery — where  were  they  manufac- 
tured? Some  in  the  United  States,  some  in  France, 
some  in  Austria. 

These  things  are  surplus  productions  of  persons  liv^ 
ing  and  working  long  distances  from  one  another.  One 
produces  enough  for  a  thousand  in  some  instances,  and 
he  in  turn  is  one  of  many  that  consume  what  some 
other  person  made  or  raised  many  miles  away. 

Most  of  us  are  producers,  all  of  us  are  consumers ; 
and  what  we  consume,  besides  what  we  ourselves  have 
produced,  is  part  of  the  surplus  that  other  persons 
have  produced. 

It  is  this  surplus  of  production  that  the  producers 
•ell  and  that  consumers  buy. 


444  SILVER  AKD  GOLD. 

And  because  the  two  factors — producer  and  con- 
sumer— live  and  work  far  apart,  it  is  a  great  conveni- 
ence to  have  home  traders  and  merchants  to  collect  the 
surplus  from  those  who  produced  it  and  distribute  it 
among  those  who  wish  to  consume  it.  A  very  large 
nuqiber  of  the  people  are  engaged  in  this  work  of  col- 
lection and  distribution — as  exporters,  importers,  car- 
riers, commission  men,  brokers,  bankers,  merchants, 
salesmen,  etc.  This  is  commerce.  It  would  however, 
be  an  impossible  thing  for  men  to  carry  on  the  traffic 
of  the  world  if  they  had  no  means  of  representing  the 
value  of  property  dealt  in,  and  some  means  of  trans> 
porting  the  values  as  well  as  for  moving  commodities. 
Such  means  is  found  in  what  we  call  money,  and  in 
certain  forms  of  paper  often  used  in  place  of  money. 

The  amount  of  this  surplus  property  which  is  being 
moved  from  place  to  place  in  order  to  take  it  from  the 
persons  who  wish  to  sell  it,  and  get  it  to  those  that 
want  to  use  it,  is  beyond  our  comprehension,  and  the 
character  and  number  of  vehicles  employed  in  trans- 
portation are  too  many  for  enumeration.  It  is  officially 
stated  that  the  property  carried  over  American  rail- 
roads and  canals  and  on  our  river  boats  and  coasting 
vessels,  is  greater  in  tonnage  and  value  than  that  of 
the  combined  foreign  commerce  or  all  the  great  nations 
of  Europe. 

It  is  to  procure  part  of  this  enormous  surplus  that 
most  of  the  labor  of  the  world  is  performed.  The 
greatest  problem  of  life  is  to  live — ^to  procure  the 
means  of  subsistence ;  and  what  of  our  needs  we  can- 
not supply  from  that  which  we  ourselves  produce,  we 
must  supply  out  of  what  others  have  to  spare.  To 
effect  these  exchanges,  money  is  imperatively  required. 


SENATOll   W.  A.  PBFFEB.  145 

Obigin  of  Money. 

Without  stopping  now  to  consider  what  other  uses 
there  are  for  money,  as,  to  pay  for  labor,  to  pay  debts, 
taxes  and  other  demands  upon  our  resources,  let  vs 
keep  our  minds  closely  on  the  subject  of  procuring 
things  we  need  for  food,  clothing,  shelter — things  need- 
ful to  sustain  life  and  to  supply  comforts  and  special 
luxuries.  It  was  in  the  development  of  commerne 
that  money  was  invented.  Money  is  an  invention-  - 
the  fruit  of  discovery,  just  as  machines  are  invented  in 
order  to  apply  certain  mechanical  principles  which 
have  been  discovered.  In  the  beginning  of  trade,  tlierc 
was  no  money.  All  exchanges  of  property  were  made 
for  other  property — article  for  article.  It  was  early  dis- 
covered that  certain  metals,  because  of  their  beauty  in 
the  pure  state,  and  because  of  their  fineness  of  sub- 
stance, their  indestructibility,  and  their  susceptibility  to 
high  and  brilliant  polish,  were  peculiarly  well  adapted 
to  use  in  ornamenting  the  person,  the  home,  the  tem- 
ple, the  palace  and  all  resorts  of  pleasure  and  passion. 
Early  it  became  common  to  adorn  public  building? 
with  articles  made  of  gold  and  silver.  Temples  of 
worship  were,  and  still  are,  rich  in  golden  ornaments 
— vases,  statuary,  and  the  like  These  metals  were 
articles  of  commerce  exchanged  xoy  other  things ;  and 
because  of  their  peculiar  properties  and  uses,  they 
were  universally  sought  after.  They  were  special  ob- 
jects of  prey  on  the  part  of  invading  armies.  It  is  a 
truth  of  history  that  "in  the  search  for  gold  whole 
races  of  people  have  been  put  to  the  sword,  con- 
tinents subjugated,  religions  and  civilizations  de- 
stroyed."   It  is  equally  true  that  men  and  women  of 


446  SILVER  AND  GOLD. 

wealth  and  fashion  have  sacrificed  honor  and  fame-^ 
even  life  itself,  for  possession  of  the  precious  metals. 

These  considerations  have  made  silver  and  gold  ob- 
jects greatly  to  be  desired  by  all  classes  of  people,  and 
we  find  that  in  the  earliest  periods  of  history,  they  were 
sought  by  traders  as  articles  of  merchandise.  History, 
sacred  and  profane,  is  full  of  commercial  transactions 
sliowing  that  gold  and  silver  were  always  in  demand  for 
trade.  Abraham  "  weighed  "  out  four  hundred  shekels 
of  silver,  "  current  money  with  the  merchant,"  and 
Joseph  was  sold  for  "  twenty  pieces  of  silver." 

And  in  that  way  the  precious  metals  became  money 
— current  money  with  the  "  merchant."  They  came  to 
have  a  commercial  value,  the  same  as  other  articles  of 
merchandise  ;  and  because  a  small  quantity  of  them  by 
weight,  would  exchange  for  much  greater  quantities, 
by  weight,  of  other  articles,  and  because  goods  had  to  be 
transported  by  caravans  long  distances  between  trading 
points,  these  metals,  when  they  could  be  procured, 
served  well  as  a  sort  of  medium  by  n^ans  whereof 
trade  in  other  things  was  always  profitable. 

In  time,  rulers  of  nations  undertook  to  regulate  trade 
in  the  precious  metals  by  impressing  on  them  certain 
marks  to  show  officially  their  weight,  so  that  in  making 
exchanges  for  other  property  all  parties  might  be  ap- 
prised of  the  weight  of  the  metal,  and  then  they  could 
put  their  own  value  on  it  as  measured  by  values  ot 
other  things.  They  were  exchanged  by  weight  in  one 
form  or  other  and  their  value  in  relation  to  other 
articles,  and  the  value  of  other  articles  in  relation  to 
the  metals,  came  to  be  more  and  more  distinct  and 
regular  as  commerce  spread  among  the  nations,  uptil 
at  length, 


senator  w.  a.  peffeb.  44t 

Cebtain  Values  Were  Assigned  by  Law 

to  certain  weights  of  the  metals.  This  legal  value 
varied  from  time  to  time  and  iu  different  countries,  not 
only  with  respect  to  the  values  of  other  things,  but 
with  respect  to  the  metals  themselves. 

In  the  sands  of  the  rivers  of  India  and  of  the 
regions  north  of  the  Himalaya  mountains,  as  well  as 
those  of  Egypt  and  Arabia,  were  found  great  quantities 
of  fine  gold,  but  there  was  no  silver  there;  hence, 
until  traders  began  to  exchange  silver  from  the  mines 
of  Greece  and  Spain  for  gold  in  eastern  countries,  sil* 
ver  was  the  more  costly  metal  in  the  gold  regions,  and 
gold  the  more  costly  in  the  silver  regions.  During  the 
greater  part  of  the  second  century  B.  C,  one  pound  of 
silver  was  worth  ten  pounds  of  gold  iu  Arabia.  In 
earlier  times  the  difference  had  been  twice  as  great. 
In  ancient  China  and  Japan  the  ratio  between  the  two 
metals  was  always  low.  In  Egypt,  in  very  early  times, 
the  ratio  was  one  of  gold  to  two  and  a  half  of  silver,  by 
weight. 

Ratio  between  Silver  and  Gold. 

The  relative  value  of  the  precious  metals  compared 
with  one  another  or  with  the  values  of  other  property 
cannot  be  ascertained  by  cost  of  production.  War, 
which  was  always  in  progress  somewhere,  was  the  great 
disturber  of  prices.  There  were  sudden  changes  of 
ratio  following  the  conquests  of  Alexander,  Julius 
Csesar,  Cortez  and  Pizarro.  And  this  was  caused  by 
the  movement  of  large  quantities  of  the  metals  from 
place  to  place  by  the  conquering  armies. 

With  the  decline  of  the  Roman  Empire,  gold  went 
east  and  trade  with  Europe  fell  off  until  revived  by 


448  BILYEB  AND  GOLD. 

Arab  merchants  during  the  seventh  century.  After- 
ward the  Venetians  opened  trade  with  the  Oriental  na- 
tions, taking  to  Asia  *'  slaves,  weapons  of  war,  grain, 
ship  and  other  timber,  and  iron,*'  and  got  in  return 
*^  gold,  gold  dust,  silver,  spices,  drugs,  sugar,  and  other 
commodities." 

Gradually,  as  commerce  spread,  and  until  the  discov- 
ery of  America,  the  ratio  between  the  values  of  silver 
and  gold  grew  to  12  to  1.  The  English  mint  ratio  in 
1482  was  11.16  to  1.  In  North  Germany  in  1408  it  was 
12.80  to  1.  The  commercial  ratio  in  England  in  1687, 
is  given  at  14.94  to  1,  and  it  did  not  reach  16  to  1  un- 
til 1808,  when  it  was  16.08  to  1.  It  never  went  be- 
yond these  last  figures,  except  in  1818,  when  it  reached 
16.25  to  1,  until  1875,  when  it  was  16.59  to  1,  and  has 
not  been  below  that  since. 

Unit  of  Value. 

Slowly,  in  the  course  of  trade  among  people  of  one 
locality,  and  in  the  development  of  commerce  among 
people  of  different  places,  men  became  familiar  with 
certain  ideas  or  estimates  of  value  attaching  to  partic- 
ular articles  when  measured  by  the  value  of  some  one 
or  more  other  things ;  they  employed  certain  words, 
names  or  signs  to  represent  those  ideas  or  estimates  of 
value ;  and  when  they  came  to  use  some  particular  ar- 
ticle or  a  certain  weight  of  some  particular  article,  as  a 
means  of  representing  the  idea  or  estimate  of  value  and 
also  to  use  it  as  a  medium  of  exchanging  other  prop- 
erty, they  gave  to  it  the  name  or  designation  which 
they  used  in  expressing  the  idea  of  a  unit  of  value. 

Every  nation  has  its  own  familiar  names  or  words  to 
express  values,  and  they  use  no  other.    In  Great  Brii- 


SENATOR  W.  A.   PKFFBB.  449 

ian,  values  are  expressed  in  pounds,  shillings,  pence 
and  farthings.  In  France,  the  unit  of  value  is  ex- 
pressed by  the  word  "franc";  in  Germany  it  is 
«*  mark " ;  in  the  United  States  it  is  "  dollar."  An 
American,  not  accustomed  to  the  use  of  any  coins  but 
our  own,  does  not  know  how  to  express  value  in  francs 
or  marks;  and  Frenchmen  and  Germans,  who  are  not 
familiar  with  our  coins,  do  not  know  how  to  estimate 
or  state  value  in  dollars.  Nor,  could  any  of  us,  whether 
American,  Frenchman,  German  or  Englishman,  esti- 
mate values  by  the  weight  of  the  metals  of  which  our 
coins  are  made.  No  man  here  or  elsewhere  would  think 
of  stating  the  value  of  his  horse  or  his  farm  in  pounds 
or  ounces  of  gold  or  silver,  and  yet  it  is  by  weight  of 
metal  that  property  is  paid  for  when  payment  is  made 
with  metallic  coins.  We  do  not  express  values  by  the 
weight  of  some  kind  of  property.  We  are  accustomed 
to  use  words  for  that  purpose  that  do  not  express  the 
idea  of  weight  at  all — words  that  express  the  idea  of 
value  and  nothing  else.  In  truth,  value  is  an  idea  and 
cannot  be  precisely  defined.  It  is  a  relation  existing 
between  productions  of  labor  with  respect  to  their  use 
fulness  or  desirability  among  people  who  use  them  or 
desire  their  possession. 

A  bushel  of  wheat  may  be  worth  a  dollar  in  money. 
But  what  is  its  value  in  corn,  or  cotton,  or  cloth,  or  oil 
or  any  one  of  a  thousand  other  articles?  And  what 
is  the  value  of  a  dollar  when  expressed  in  any  of  these 
other  things  ? 

Value  is  necessarily  a  relation,  an  idea  or  conception 
of  the  mind.  But  after  we  have  become  familiar  with 
a  certain  word  to  express  what  we  have  learned  to  re- 
gard as  a  unit  of  value,  we  employ  that  word  for  the 


460  SILVEB  AND  GOLD. 

purpose  and  comprehend  its  application  perfectly ;  and 
by  the  use  of  that  term  we  express  or  estimate  value 
readily  and  understandingly.  If  I  am  asked  the  value 
of  my  farm  or  of  any  other  property  which  I  own,  I 
would  not  think  of  answering  in  wheat,  or  bacon,  or 
flour,  or  in  anything  but  dollars,  and  because  we  have 
all  become  accustomed  to  express  values  by  the  use  of 
the  word  dollar. 

And,  as  before  stated,  when  we  use  some  substance 
or  a  certain  quantity  of  some  substance  to  represent  a 
dollar — that  is,  the  value  of  our  unit,  we  call  that  thing 
a  dollar,  and  its  multiple  a  certain  number  of  dollars. 
For  example,  when  our  government  was  organized,  the 
Spanish  milled  dollar  was  current  in  the  country,  the 
people  were  familiar  with  its  use,  and  it  was  taken  as 
the  representative  of  our  unit  of  value — the  dollar.  An 
American  silver  coin  with  American  devices,  but  to  con- 
tain 871^  gprains  of  pure  silver,  and  to  be  of  the  value 
of  a  Spanish  milled  dollar,  ^^  as  the  same  is  now  (then) 
current,"  was  authorized  by  our  first  mint  act  in  1792. 
All  multiples  of  the  unit  were  made  of  gold  ;  divisions 
of  the  dollar,  down  to  five  cents  were  made  in  silver ; 
and  one  hundredth  part  of  a  dollar  was  represented  by 
a  copper  one-cent  piece. 

In  1873,  our  unit  or  dollar  piece  was  changed  from 
silver  to  gold,  and  the  silver  dollar  was  dropped  from 
the  list  of  coins  to  be  thereafter  minted. 

From  the  beginning  in  1793,  to  1878,  our  total  coin- 
vge  amounted  to : — 

Gold |1,O97,083;511.SO 

SUver 172,392,780.23 

Ttotal..-...^ 11,270,076,291.45 


LEVI  P.    MOETON, 


V 


^> 


:e?-^ 


Of 


ii 


S^ 


TJKIYi:.  ::ty 


8ENATOB  W.   A.   PEFFEB.  458 

Total  amount  from  1793  to  June  30,  1894— 

Gold 11,771,880,288.00 

Silver 675,954,221.30 

Total $2,447,834,509.30 

Amount  op  Money — Coin— in  Circulation. 

It  appears  from  the  treasury  statement  for  May  1, 
1895,  that  the  amount  of  gold  coin  in  the- United  States 
outside  the  national  treasury  at  thcit  time  was  estimated 

to   be $483,111,526 

Amount  in  Treasury 89,954,140 

TotoUtock $573,065,665 

This  amount  is  probably  50  per  cent,  too  large  ;  for 
aside  from  the  fact  that  the  figures  are  privately  con- 
ceded to  be  inaccurate,  if  the  President  and  the  Secre- 
tary of  the  Treasury  were  satisfied  there  is  more  than 
half  that  much  gold  in  the  country,  they  would  hardly 
have  ignored  our  own  people  in  the  matter  of  bond 
sales. 

It  is  well  known  that  Austria-Hungary,  Italy  and 
Bussia  have  been  laying  up  gold  for  some  time  past ; 
and  it  is  a  fact  equally  well  understood  that  citizens 
of  the  United  States  and  others  have  taken  large 
amounts  of  gold  from  this  country  on  tours  of  travel. 

But,  assuming  the  treasury  figures  to  be  substantially 
correct,  we  have  in  the  country : — 

Gold $673,065,665 

BiWer  dollars 423,127,039 

Total $996,192,704 

Of  this   amount  $880,914,504  silver  is  covered  by 
26 


454  SlLVEtl   AND  GOLD. 

certificates  that  have  been  issued  against  silver  dollars, 
and  they  are  in  circulation,  but  are  not  legal  tender 
money.  The  coins,  which  are  good  tender,  are  thus 
tied  up  and  cannot  be  used  for  money  purposes  unless 
the  certificates  are  returned  to  the  treasury  and  sur- 
rendered, something  that  nobody  expects.  Our  stock 
of  coin,  then,  is  properly  subject  to  this  reduction, 
and  that  would  leave  us  only  $92,212,589  of  silver 
coin  that  can  be  called  into  use  at  any  time. 

However,  let  us  assume  that  every  silver  dollar  is  free 
and  that  we  have  at  least  $250,000,000  in  gold  more 
than  we  do  have — taking  the  treasury  figures  just  as  the 
books  show  them,  we  have,  as  above  stated,  $996,1.92.- 
704  full  lawful  tender  money  in  the  country. 

According  to  the  metallic  theory  of  money -a 
theory  and  a  practice  that  has  descended  to  us  from  re- 
mote ages  past,  this  $996,192,704  in  metal  coins,  is 
tlie  equivalent  of  all  the  rest  of  the  property  in  the 
country,  amounting  five  years  ago  to  $65,000,000,000, 
— one  dollar  in  money  to  66  dollars  in  other  propert3% 
This  would  amount  to  about  fourteen  dollars  to  the 
head  of  population,  and  we  transact  a  yearly  business 
amounting  to  more  than  100,000  million  dollars.  If  we 
divide  the  gold  by  two,  as  the  actual  facts  warrant,  we 
should  have  but  about  $300,000,000  in  gold,  and  $100,- 
000,000,  in  silver  to  work  with— a  total  of  but  $400,- 
000,000,  a  per  capita  of  a  little  over  six  dollars,  and 
of  this  total  of  gold,  the  treasury  aims  to  hold  $100,- 
000,000  as  a  reserve  fund  for  the  redemption  of  govern- 
ment notes ;  the  rest  is  mostly  held  as  bank  reserves. 

If  the  gold  monometallists  theory  and  practice  is  the 
correct  one,  then,  at  best — conceding  all  they  claim,  us- 
ing the  treasury  figures,  false  and  misleading  as  they 


8EKATOB  W.  A.  PEFFEK.  456 

are,  still  we  would  have  only  a  little  over  $500,000,000, 
with  a  reserve  of  $100,000,000  that  cannot  be  touched 
except  for  redemption  purposes,  leaving  us  at  most 
only  $400,000,000  to  handle  a  business  of  100,000  mil- 
lions— one  dollar  in  gold  to  be  the  equivalent  of 
$250  of  other  property  in  trade. 

But  this  is  not  all.  Our  public  and  private  debts 
amount  to  about  $25,000,000,000,  a  sum  equal  to  the 
assessed  value  of  all  our  taxable  property  in  1890,  and 
this  enormous  indebtedness,  according  to  the  gold 
party  policy,  must  be  paid  finally  out  of  our  §400,000,* 
000  gold  coin.  This,  it  appears  to  me  is  impossible. 
We  could  pay  only  as  Micawber  paid — with  our  notes^ 
renewed  every  pay  day. 

Restore  the  Law  of  1887. 

Hence,  I  favor  the  immediate  restoration  of  silver 
to  its  ancient  place  as  one  of  our  money  metals.  Let 
gold  and  silver  be  coined  in  unlimited  amounts,  on 
exactly  equal  terms,  as  it  was  done  under  the  act  of 
January  18, 1887,  and  at  the  weights  and  ratio  therein 
provided.     I  favor  this  policy — 

First. — Because  we  have  not  lawful  tender  coin 
enough  for  the  legitimate  demands  of  our  trade. 

Second. — Because  we  shall  require  much  more  coin 
than  we  now  have  to  pay  our  coin  obligations,  and 
more  than  we  will  ever  have  if  we  persist  in  main- 
taining an  exclusively  gold  basis. 

Third. — Because  this  policy  would  tend  to  revive 
business,  stimulate  enterprise,  employ  labor  and  capital, 
and  encourage  the  people. 

As  to  the  first  reason,  if  the  fact  were  not  self-evi- 
lent   that   we   have   not   now  gold   coin  enough  to 


456  STLYEB   A.KD  GOLD. 

transact  our  business  with,  it  needs  only  be  said  that 
from  actual  tests  it  appears  that  only  about  one  per 
cent,  of  the  business  done  in  and  through  our  bank- 
ing houses,  is  done  with  gold.  A  less  amount  is 
done  with  silver.  We  are  compelled  to  use  various 
forms  of  paper  to  make  up  the  difference  between  two 
per  cent,  and  one  hundred  per  cent.  And,  although 
we  use  large  amounts  of  greenbacks,  treasury  notes, 
silver  certificates,  and  national  bank  notes,  still,  even 
with  these  added  to  the  metal  coins,  we  are  able  to 
supply  only  eight  per  cent,  of  the  demand,  and  we  do 
all  the  rest  of  our  trade — 92  per  cent.,  with  private 
paper,  notes,  checks,  bills,  drafts,  etc. 

Only  one  per  cent,  of  our  business  is  done  with  our 
present  basic  coin — gold.  Ninety-nine  per  cent,  is 
done  with  substitutes  for  gold.  Silver  is  discredited 
by  the  government,  and  a  contract  written  payable  in 
gold,  excludes  the  use  of  every  other  kind  of  money 
in  payment,  notwithstanding  the  promises  and  pledges 
of  partisans  tliat  every  dollar  is  as  good  as  every  other 
dollar. 

Second. — Our  national  interest-bearing  debt  now 
amounts  to  about  $750,000,000,  of  which  $25,000,000 
is  payable  at  the  option  of  the  government ;  $559,000,- 
000  is  payable  July  1,  1907;  $100,000,000  payable 
February  1, 1904  ;  the  rest  payable  in  1926. 

All  of  this  is  to  be  paid  in  coin  of  the  value  of  our 
coin  on  the  14th  day  of  July,  1870,  the  day  the  refund- 
ing act  was  approved.  All  our  bonds  now  out  were 
issued  under,  and  in  accordance  with,  the  provisions  of 
that  act,  in  so  far  as  the  matter  of  their  redemption  or 
payment  is  concerned.  The  words  of  the  statute  are 
— ^^  redeemable  in  coin  of  the  present  standard  value.*' 


8EKAT0B  W.   A.  PEFFEB.  457 

At  that  time,  and  for  eighty  years  prior  thereto,  our 
coin  consisted  of  gold  and  silver. 

It  is  clear  that  were  any  part  of  the  bonds  now  due 
and  payable,  and  if  we  would  pay  them  with  gold,  we 
should  have  to  borrow  every  dollar  that  we  would  pay ; 
for  we  have  lately  been  obliged  to  sell  upward  of  'tl62,- 
000,000  in  bonds  to  restore  the  f  100,000,000  gold  re. 
serve,  and  that  is  about  all  the  gold  the  government 
has  or  will  have  without  the  sale  of  more  bonds.  And 
if  our  present  policy  is  to  be  continued,  we  shall  never 
be  any  better  off,  in  this  respect,  than  we  are  now ;  for, 
it  must  be  remembered  that  according  to  our  present 
policy,  the  greenbacks  and  treasury  notes — nearly  $500,- 
000,000,  in  all,  are  redeemable  in  gold,  though  the  law 
says  ^*coin;"  and  if  all  the  notes  were  presented  at 
once,  or  within  a  year,  for  redemption,  there  is  not  gold 
enough  in  the  country  to  pay  them.  The  government 
is  the  redeemer,  and  it  has  not  one-fifth  part  enough 
gold  in  the  treasury  to  redeem  all  these  notes  at  once. 
What  is  still  more,  the  act  of  May  31st,  1878,  requires 
that  when  these  notes  are  redeemed,  they  shall  not  be 
cancelled,  but  shall  be  paid  out  again  and  ^'  kept  in 
circulation ; "  so  that,  if  once  paid,  they  may  be  pre- 
sented again  and  again,  and  there  is  no  end  to  the 
process  of  redemption.  We  have  recently  seen  such 
an  operation  twice  performed  within  thirteen  months, 
and  it  may  be  repeated  any  time  that  it  suits  the  pleas- 
ure of  the  money-changers  to  make  another  raid  on 
the  treasury.  Where  is  the  gold  to  come  from  to  keep 
up  this  interminable  redemption?  It  must  be  borrowed 
on  public  credit.  There  is  no  other  resource,  unless 
we  change  our  policy  and  restore  the  old  law  and  th« 
old  policy  of  coining  and  using  sUver  money. 


468  SILVEB   AND  GOLD. 

Third. — It  is  a  well  settled  fact  in  the  history  of 
money,  that  a  large  supply  in  active  circulation  oper- 
ates as  a  stimulus  to  business  enterprise.  Prices  are 
well  maintained  and  the  people  prosper.  Without 
stopping  now  to  discuss  the  question  whether  good 
business  makes  money  plenty,  or  whether  plenty  of 
money  makes  business  good,  we  all  agree  that  with  an 
active  circulation  of  money,  business  is  always  "  good." 
And  in  this  connection  there  is  an  important  element 
of  service  in  what  we  call 

Free  Coinage. 

It  puts  money  out  at  once  among  the  people,  while 
if  bullion  is  purchased  for  coinage  and  paid  for  with 
paper,  the  coin  is  apt  to  be  stored  and  may  not  get  into 
circulation  at  all.  It  would  change  the  situation  if 
coinage  value  was  paid  for  the  bullion  and  the  paper 
made  full  legal  tender.  But  none  of  our  paper,  under 
the  present  practice  and  under  existing  laws,  will  pay 
a  gold  debt;  at  any  rate,  not  till  after  judgment  is 
taken  and  execution  issued.  The  court  could  not  en- 
force payment  in  gold,  even  though  the  judgment  be 
for  gold.  The  security  would  be  sold  for  whatever  it 
would  bring  in  dollars,  and  that  wHild  be  the  end  of 
the  transaction. 

Free  coinage  means  that  when  a  person  takes  buUiop 
to  the  mint  it  will  be  coined  for  him  free  of  charge 
He  takes  the  coin  when  it  is  ready,  and  he,  not  the 
government,  puts  it  into  circulation.  He  wants  it  Us 
circulate  and  for  no  other  purpose.  It  is  of  no  use  to 
him  unless  it  does  circulate.  His  first  efiPbrt  after  get' 
ting  the  coin  into  his  possession,  is  to  find  some  profit-^ 
able  way  of  getting  rid  of  it.    He  immediately  pute  if 


8ENATOB  W.   A.  PEFFEJl.  469 

where  it  will  begin  to  perform  its  lawful  functions  as 
money.  Hence,  free  coinage  of  silver  would  at  once 
get  fresh  money — ^fuU  lawful  tender  money — ^into  active 
circulation,  leaving  blessings  in  its  wake. 

Objections  Considered. 

Concerning  objections  commonly  urged  against  the 
bimetallic  basis,  I  have  little  to  say  here.  If  it  be 
true,  as  the  Bullion  Report  of  1810  puts  it,  and  we  all 
agree  on  the  proposition,  that  there  is  gold  enough  in 
the  world  to  do  the  business  of  the  world,  the  level  of 
prices  rising  and  falling  with  the  quantity  of  gold  in 
use  as  money,  it  follows  that  with  an  absolute  or  a  re- 
lative diminution  of  the  quantity  of  money  in  use,  the 
level  of  prices  will  fall,  and  with  an  enlargement  of 
the  money  volume,  the  level  of  prices  will  rise, 
Everybody  concedes  this  ;  and  all  but  the  gold  specu- 
lators concede  that  the  deplorable  condition  of  busi- 
ness for  some  years  past  is  due  in  some  measure  at 
least  to  a  diminution  of  the  world's  legal  tender  money 
through  the  demonetization  of  silver.  If  they  do  not 
concede  this,  their  manifestation  of  desire  for  an  inter- 
national coinage  ratio  is  hypocrisy. 

It  may  be  safely  assumed,  then,  that  ail  the  people, 
save  a  very  few,  are  of  opinion  that  we  ought  to  use 
silver  as  well  as  gold,  but  many  insist  that  it  should  be 
done  at  a  ratio  different  from  the  present  legal  limit  of 
16  to  1  by  weight.  They  argue,  notwithstanding  the 
assertion  that  legislation  cannot  impart  value  to  any 
commodity,  that  by  international  concurrence  we  can 
do  for  the  whole  world  what  no  one  nation  can  do  for 
itself — legislate  value  into  silver  and  make  it  equal  to 
gold  at  any  ratio  we  choose  to  adopt.     That  gives  U9 


\ 


460  SILVER  AND   GOLD. 

the  case  without  further  argument.  If  by  the  concur^ 
rence  of  any  number  of  nations,  silver  can  be  made 
more  valuable  in  international  commerce,  then,  by  the 
same  reasoning,  any  one  nation  can  safely  use  it  for 
local  purchases  at  any  ratio  the  people  agree  upon. 

In  1837  we  adopted  the  ratio  of  16  of  silver  to  1  of 
gold,  by  weight.  (The  exact  proportion  is  a  fraction 
less  than  16).  It  has  not  been  altered  since.  In  1870, 
when  our  debt  was  refunded  and  new  bonds  authorized, 
silver  was  more  valuable  than  gold  at  the  legal  ratio ; 
and  in  1873,  when  the  coinage  laws  were  revised  and 
the  silver  dollar  dropped  from  the  list  of  coins,  silver 
stood  103,  with  gold  at  100. 

Dbpbeoiation  of  Silver  not  Caused  by  Oveepeo- 

DUCTION. 

The  depreciation  of  silver  since  that  time  has  come 
about,  not  from  overproduction,  but  from  demonetiza- 
tion. Germany  and  the  United  States,  both  the  same 
year,  discrediting  silver  by  discontinuing  its  coinage 
except  for  subsidiary  purposes,  followed  by  France  and 
the  other  States  of  the  Latin  Union,  and  they  followed 
more  recently  by  Austria  and  Italy,  has  greatly  dimin- 
ished the  demand  for  silver  for  coinage  purposes. 
That,  and  not  overproduction,  occasioned  the  deprecia- 
tion. If  gold  had  been  treated  in  that  manner  it,  too, 
would  have  fallen  in  price.  9ut  gold  has  been  held 
up  by  the  laws  of  these  great  nations,  while  silver  has 
been  thrown  on  the  open  market  to  seek  its  level  among 
corn,  wheat,  cotton  and  other  commodities.  Great 
Britain  pays  Bank-of-England  notes  for  all  the  gold 
bullion  offered  at  the  rate  of  <£3.  17«.  9i,  per  fine 
ounce,  and  every  note  of  that  bank  has  behind  it  its 


SENATOR  W.  A.   PEFFEB.  461 

face  value  in  gold  at  this  rate  of  purchase.  In  the 
United  States  we  pay  an  eagle,  or  ten  dollars,  for  every 
282.2  grains  of  fine  gold  brought  to  the  mint.  So  it  is 
in  Germany  and  France,  and  in  all  gold-using  countries; 
they  paj'  a  fixed  sum  for  all  the  gold  bullion  brought  to 
their  mints,  and  that  fixed  sum  is  written  in  their  laws ; 
while,  as  to  silver,  that  is  purchased  just  as  corn  or 
coal  or  pork  is  bought — ^in  the  open  market,  as  it  is  re- 
quired. Gold  is  protected;  its  value  is  fixed  by  the 
law  and  maintained  by  the  law,  while  silver  is  left  to 
find  its  level  with  other  articles  in  the  wide  world  of 
commerce. 

Fluctuations  in  the  Production  of  the  Precious 

Metals. 

The  records  of  the  world^s  production  of  the  precious 
metals  show  that  it  has  not  been  uniform  from  year  to 
year,  nor  from  decade  to  decade,  nor  for  any  periods  put 
in  comparison.  On  the  contrary,  the  output  of  the  mines 
has  been  very  irregular ;  some  years  and  some  periods 
less,  and  some  more  in  the  aggregate,  less  or  more  of 
one  or  the  other  of  the  metals ;  at  one  time  gold  lead- 
ing, at  another  time  silver  leading ;  and  this  applies  not 
only  to  the  quantity  of  product,  but  to  its  value  as 
well.  Yet  the  commercial  ratio  of  value  between  the 
metals  has  varied  but  slightly  from  time  to  time  dur- 
ing five  hundred  years  prior  to  1876. 

The  United  States  Mint  report  for  1894  shows  that 
from  1493  to  1893  the  total  production  of  the  precious 
metals  was : — 

Gold .$8,391,101,000 

SUver 19,909,041,000 

During  this  500-year  period  the  excess  of  silver  pro- 
duction over  that  of  gold  was  about  18  per  cent. 


462  SILVER  AND  GOLD. 

From  1498  to  1700,  the  production  was: — 

Gold fl,107,855,000 

Silver $2,496,904,000 

For  this  period  of  more  than  200  years  the  excess  of 
silver  production  over  that  of  gold  was  103  per  cent. 
From  1701  to  1800,  the  output  was: — 

Gold ^1,262,806,000 

Silver $2,370,809,000 

Excess  of  silver  nearly  one  hundred  per  cent. 
From  1801  to  1898  the  figures  are  :— 

Gold $6,028,341,000 

Silver $5,141,328,000 

Excess  of  gold  over  silver,  17  per  cent. 
From  1851  to  1875  :— 

Gold.v $3,161,060,600 

Silver *1, 288,627,500 

Gold  excess,  150  per  cent. 

From  1876  to  1898,  the  record  shows  :— 

Gold $2,066,999,000 

Silver $2,392,334,000 

Excess  of  silver  nearly  16  per  cent. 

Ratio  has  not  Vaeied  Much. 

Notwithstanding  the  fluctuations  in  amount  of  pro- 
duction in  different  years  and  different  periods  of  years, 
the  commercial  ratio  played  between  11  to  1  and  16  to 
1  during  a  period  of  nearly  500  years,  and  no  rapid  or 
great  depreciation  of  either  metal  as  compared  with  the 
other  began  or  continued  until  after  demonetization. 

The  average  of  the  mint  ratios  of  England,  France, 
Germany  and  Spain  in  1492,  the  year  of  the  discovery 
pf  America,  was  11  to  1.    Ninety  years  before  that 


^     ' 


SENATOR   W.   A.  PBFFEB.    '  -  iSK 

**     -  ■  • ' 

time,  in  North  Germany  the  ratio  had  been  as  highas 
12.80  to  1. 

In  1687,  according  to  the  tables  of  Dr.  Soetbeer, 
copied  in  the  United  States  Mint  report  for  18^4,  the 
ratio  was  14.94  to  1.  It  reached  15  to  ?  twc  years 
later,  and  has  never  been  as  low  as  14  to  1  since ;  nor 
did  it  ever  reach  16  to  1  until  1808,  when  the  figures 
were  16.08  to  1 ;  and,  excepting  two  years,  1812  and 
1813,  when  it  was  16.25  to  1,  the  ratio  was  never  again 
above  16  to  1,  until  1874,  when  it  was  16.17  to  1,  and 
has  never  been  that  low  since.  The  fall  has  been  con- 
tinuous from  that  time.  In  1898  the  ratio  was  26.49  to 
1  and  is  now  lower. 

Silver  has  Kept  Even  With  the  General  Leybi 

OF  Prices. 

The  price  of  silver  bullion  has  not  fallen  more  than 
the  general  level  of  prices.  Many  different  combina- 
tions of  useful  commodities  have  been  presented  with 
their  index  number  100  as  the  average  price,  and  silver 
has  kept  even  in  all  of  them  with  the  downward  trend 
since  1873 — the  year  of  silver's  demonetization  in  two 
of  the  great  countries  of  the  world. 

Here  is  Prof.  Sauerbach's  table :— > 

Index  namben  of  forty-five  principal  commodities  and  silver  bjr 
Professor  Sanerbach : 


^  • 


Tear, 

45  Comg. 

Bilver. 

1874... 

102 

95.8 

1875... 

96 

98.3 

1876... 

05 

86.7 

1877... 

94 

90.2 

1878... 

87 

86.4 

1879... 

83 

84.2 

J  PVJ|I.  .. 

88 

85.9 

1881... 

86 

85 

1882... 

84 

84.9 

1H83... 

88 

83.1 

Tear. 

45  Corns. 

aiher. 

1884... 

76 

83.3 

1885.... 

72 

79.9 

looO.... 

69 

74.6 

1887.... 

68 

73.3 

1888... 

70 

70.4 

I0017....1 

72 

70.2 

1890.... 

72 

78.4 

1891.... 

72 

74.1 

1892.... 

68 

65.4 

464  SILVER   AND  GOLD. 

These  45  commodities  comprise  the  principal  articles 
of  grain,  provisions,  clothing,  fuel,  etc.,  articles  com- 
monly used  and  regarded  as  necessaries. 

About  Honest  Money. 

As  to  the  honesty  of  restoring  silver,  there  is  no 
question  of  honor  involved.  The  coinage  of  money  and 
the  regulation  of  the  value  thereof  is  within  the  exclu- 
sive jurisdiction  of  congress.  That  body  may  make 
money  coins  out  of  gold,  silver,  copper,  nickel,  paper, 
or  any  other  substance.  The  language  of  the  Consti- 
tution is :  *^  Congress  shall  have  power  to  coin  money 
and  regulate  the  value  thereof.*'  *'  No  State  shall  coin 
money  or  make  anything  but  gold  and  silver  coin  a 
tender  in  payment  of  debts.''  But  congress  never  has 
guaranteed  the  market  value  of  any  of  the  materials  out 
of  which  it  authorizes  coins  to  be  made.  It  once  (1884) 
took  six  per  cent,  of  pure  gold  out  of  our  coins,  and  the 
lighter  weight  afterwards  paid  debts  quite  as  well  as 
the  heavier  weight  had  done  before.  In  1863  we 
reduced  the  weight  of  our  smaller  silver  coins,  but  they 
have  always  paid  their  way  as  the  heavier  coins  had 
previously  done.  Our  minor  coins  now  are  not  one 
quarter  full  weight,  yet  the  law  has  somehow  put  full 
value  into  them.  We  have  perfect  legal  and  moral 
right  to  make  our  coins  of  whatever  material  we  choose 
and  give  them  the  value  that  suits  us.  We  never 
promised  to  pay  anything  more  than  our  lawful  coins, 
and  if  creditors  do  not  wish  to  take  these,  let  them  take 
our  corn,  or  cotton,  or  whatever  else  we  have  that  they 
do  want,  and  they  can  turn  that  into  money  that  will 
suit  them. 

Let  the  reader  not  forget  that  the  laws  do  not  pre* 


SEKATOB  W.   A.  PEFFEB.  465 

tend  CO  regulate  the  value  of  bullion.  It  »  coin  that 
the  law  imparts  value  to — ^legal  value,  not  value  in  the 
abstract  and '  as  compared  with  the  values  of  other 
property.  The  law  provides  only  that  coins  shall  be 
made  of  certain  metals  by  weight,  and  that  the  coins 
shall  have  a  certain  legal  value,  no  matter  what  may  be 
the  market  price  of  bullion.  The  paper  in  a  paper, 
dollar  has  no  market  value,  but  the  paper  dollar  was 
good  when  there  was  neither  gold  or  silver  money  cir- 
culating in  the  country. 

Our  lawful  coin  in  1870,  when  the  refunding  bonds 
were  authorized,  consisted  of  dollar  coins  of  412^  grains 
of  standard  silver,  and  multiples  of  dollars  in  gold  coins 
at  the  rate  of  25.8  grains  of  standard  gold  to  the  dollar. 
The  law  obligates  us  to  redeem  the  bonds  in  "  coin  of 
the  present  standard  value."  The  standard  value  of 
the  silver  coin  was  one  dollar ;  the  value  of  the  gold 
coins  was:  the  eagle,  ten  dollars;  the  half-eagle,  five 
dollars ;  the  quarter-eagle,  two  and  one  half  dollars. 
And  their  values  have  not  been  altered  since.  If,  then, 
we  pay  in  these  coins  or  either  of  them,  we  comply  with 
the  terms  of  the  contract. 

I  beg  the  reader  to  remember  that  our  metallic  cur- 
rency consists  of  coin,  not  bullion.  If  we  had  promised 
to  pay  in  bullion,  the  language  of  the  law  would  have 
so  provided,  and  we  would  have  said  so  many  ounces 
of  silver  bullion  or  of  gold  bullion  ;  or,  we  would  have 
said  bullion  at  a  certain  price  per  ounce. 

But  we  said  coin,  and  the  laws  had  long  ago  fixed  the 
weight  and  value  of  onr  coin. 

In  the  contract  entered  into  last  winter  by  the  Secre* 
tary  of  the  Treasury  with  the  Morgan-Rothschild  syndi- 
cate, the    word  *'coin"  does  not  appear;  nor  does 


46b  SniVEB  AND  GOLD. 

**  dollar,'*  or  "  pound,"  or  "  franc,"  or  **  mai'k,"  or  the 
name  of  any  other  coin.  The  contract  requires  the  de- 
livery of  a  certain  quantity  of  gold  measured  by  ounces. 

Our  obligations  are  payable  in  coin,  coin  only,  and 
nothing  but  coin;  and  there  is  nothing,  absolutely 
nothing,  in  the  contract  or  in  our  laws  providing  that 
our  coins  shall  be  measured  by  the  market  value  of 
bullion  or  of  anything  else.  Our  unit  of  value  was  and 
is  the  dollar,  and  it  was,  when  all  our  coin  obligations 
were  contracted,  to  be  represented  by  a  coin  weighing 
412,1  grains  of  standard  silver — silver  nine-tenths  fine, 
without  reference  to  the  market  value  of  silver  bullion. 

It  would  be  nonsense  to  say  ^'  redeemable  in  coin 
measured  by  the  market  value  of  bullion  when  the  debt 
matures."  If  that  was  to  be  the  construction  of  the 
contract,  we  would  have  so  written  it  and  the  words 
would  be — "redeemable  in  gold  at  its  market  value  in 
London,  England." 

Call  silver  coins  fifty-cent  dollars,  if  you  choose  j 
they  are  quite  as  honest  as  200  cent  dollars,  and  that  is 
the  value  of  gold  dollars  now  measured  by  the  value  of 
articles  in  general  use  among  the  people.  These  ar- 
ticles, generally,  that  is  to  say,  the  general  level  of 
prices,  has  fallen  fifty  per  cent,  since  1873 ;  so  that  if 
we  should  measure  gold  coins  by  the  general  level  of 
prices,  as  the  gold  party  insists  that  we  shall  do  with 
respect  to  silver  coins,  we  would  find  that  the  gold 
dollar  is  a  200-cent  dollar,  and  the  silver  dollar  is  a  100- 
cent  dollar — an  honest  dollar. 

This  quibbling  over  the  value  of  meWl  dollars  proves 
two  assertions — (1)  that  our  financial  affairs  are  con- 
trolled by  brokers  and  speculators;  and  (2)  that  we 
shall  never  have  a  just,  safe,  sound  and  satisfactory 


SENATOR  W.   A.  PBFFBB.  467 

monetary  system  until  we  discard  metals,  and  thus  get 
rid  of  the  men  that  prey  on  the  people  and  rob  them 
through  interest  and  rent. 

Paper  is  the  best  material  for  money  coins,  but  I 
have  undertaken  only  to  show  why,  as  we  are  at  pres- 
ent situated,  with  our  gold  monometallic  system  in  full 
operation,  and  with  our  coin  obligations  out,  we  ought 
promptly  to  restore  the  old  system  of  free  coinage  of 
both  gold  and  silver  at  the  present  ratio,  to  the  end 
that  we  may  have  coin  on  hand  to  redeem  our  promises 
honestly  and  in  good  faith. 

I  pray  that  the  government  of  the  United  States  will 
never  again  enter  into  any  sort  of  a  contract  requiring 
us  to  pay  anything  but  dollars.  With  our  immense  ex- 
port trade,  we  shall  at  all  times  be  able  to  sell  our 
products  and  with  the  proceeds  pay  our  debts.  Our 
dollars  ought  to  represent  our  property,  all  that  we 
have,  and  not  merely  the  little  gold  in  our  possession  ; 
and  our  money  ought  to  be  made  of  material  which,  in 
small  bits,  would  have  no  appreciable  market  value. 
Then  it  would  not  be  *'  cornered,"  and  when  war  or 
hard  times  should  come  it  would  not  slink  away  and 
liide.  When  the  people  need  money  they  ought  to 
have  it  within  easy  reach. 


168  SILYBR  AND  GOLD. 


CHAPTER  XXVn. 

BT  X.  BOSEWATEB,  EDITOB  OF  THB  OMAHA  BEB. 

The  unprecedented  disturbance  and  depression  of 
t.ade,  commerce  and  industry' which  first  manifested 
iuelf  in  a  marked  degree  in  1878  and  has  prevailed 
m  fth  fluctuations  of  intensity  up  to  the  present  time, 
h.^  been  interpreted  by  many  as  the  natural  result  of 
the  disuse  of  silver  as  a  money  metal  by  the  leading 
nations.  Some  of  the  most  prominent  public  men  in 
America,  notably  members  of  congi*es8  from  silver 
producing  states,  have  taken  this  view  of  the  phenome- 
nal and  universal  decline  in  prices.  It  can  hardly  be 
Biiid  that  these  parties  are  disinterested,  or  in  other 
words  that  their  conclusions  have  not  been  biased  by 
their  anxiety  to  unduly  stimulate  the  silver  industry 
and  by  the  heavy  profits  which  the  bonanza  mining 
millionaires  expect  to  reap  from  a  restoration  of  un- 
limited silver  coinage.  Those  who  have  taken  the 
pains  to  look  beneath  the  surface  and  study  the  prob- 
lem in  all  its  bearings  ascribe  the  decline  of  prices  to 
multifarious  causes.  If  a  comet  had  appeared  in  the 
sky  in  1878  and  remained  in  sight  within  our  planetary 
system  for  the  past  twenty-two  years,  there  would 
doubtless  have  been  any  number  of  scientific  charlatans 
who  would  ascribe  to  the  presence  and  proximity  of 
the  comet  all  the  cyclones,  the  drouths,  hailstorms, 
floods  and  epidemic  diseases  that  have  occurred  during 
that  period.     And  there  would  have  been  millions  of 


BOBERT  T.    UNCOLN, 


E,    BOSEWATBB.  4T1 

people  credulous  enough  to  believe  in  the  terriblo 
effects  of  the  comet  upon  our  system,  and  nobody 
eould  dissuade  them  from  that  belief.  It  is  so  with 
the  financial  charlatans  who  charge  every  disaster  that 
has  befallen  the  financial  and  commercial  world  within 
the  past  twenty-two  years  to  the  divergence  between 
silver  and  gold  and  the  disuse  of  silver  as  a  money 
metal.  This  decline  in  prices  has  been  universal^ 
affecting  nations  that  had  been  involved  in  war,  as  well 
as  those  which  have  maintained  peace,  those  which 
have  a  stable  currency  based  on  gold,  and  those  which 
liave  an  unstable  currency  based  on  promises  which 
have  not  been  kept ;  those  who  live  under  a  system  of 
free  exchange  of  commodities  and  those  whose  ex- 
changes are  restricted  by  protective  duties.  The  de- 
cline in  prices  has  affected  alike  England,  Germany, 
Australia,  South  Africa,  the  East  Indies  and  California. 
The  poverty  in  Australia  was  reported  as  more  extreme 
in  1885  than  at  any  former  period  in  the  history  of  the 
colonies.  And  Australia  had  $32  of  money  per  capita. 
Does  it  stand  to  reason  that  the  restriction  in  the  coin- 
age of  silver  alone  was  responsible  for  this  universal 
depression  ?  Is  not  the  true  cause  to  be  sought  in  the 
grest  industrial  revolution  that  has  been  in  progress  all 
over  the  world  within  the  past  quarter  of  a  century  ? 
Take,  for  instance,  the  trade  depression  in  Germany. 
The  war  indemnity  which  had  been  exacted  of  France 
in  1871  made  Germany  flush  with  money.  Ready 
capital  became  so  abundant  that  banking  institutions 
jilmost  begged  for  opportunities  to  place  their  loans,  and 
Interest  rates  fell  as  low  as  1  per  cent.  As  a  legitimate 
result  the  whole  country  invested  and  engaged  in  all 
manner  of  new  industrial  and  fijiancial  enterprises.  In 
27 


47i  biLV£B   AND   OOIJ>. 

Prussia  Uiune  687  new  joint  stock  companies  were 
founded  during  the  year  1872,  with  an  aggregate  cap- 
ital of  $481,000,000.  The  sudden  growth  of  indus- 
tries, the  temptations  of  cities  and  towns  which  as- 
sumed a  rapid  and  unhealthy  growth,  induced  hundreds 
and  thousands  of  men  and  women  to  desert  their  farms 
and  seek  employment  in  trades.  Reaction  and  disaster 
came  with  great  suddenness.  In  the  fall  of  1873  great 
fortunes  rapidly  melted  away,  industry  became  para* 
lyzed  and  the  whole  of  Germany  passed  at  once  from  a 
condition  of  great  prosperity  to  a  depth  of  financial 
nnd  industrial  depression  never  before  equalled.  In 
the  United  States  the  crash  of  1873  was  preceded  by 
several  years  of  high  prices,  large  profits,  large  impor- 
tations, a  railway-building  mania,  expanded  credit, 
over-trading,  over-building  and  high  living.  The  fail- 
ure of  Jay  Cooke  &  Co.,  precipitated  the  crisic. 
Within  twenty-four  hours  aft^r  the  collapse  of  tho 
Northern  Pacific  balloon  nineteen  banking  houses  had 
failed,  and  a  succession  of  bankruptcies  followed  which, 
within  three  years,  aggregated  $775,000,000,  while  the 
railroad  bonds  in  default  on  January  1,  1876,  were 
represented  as  aggregating  1789,867,656.  In  Great 
Britain  the  depression  and  decline  in  prices  did  not  set 
in  until  1875,  and  they  were  largely  due  to  the  com- 
mercial sympathy  that  prevails  between  England,  Ger- 
many and  the  United  States.  There  is  a  very  general 
agreement  that  in  England  and  on  the  continent  of 
Europe  the  year  1879,  1885  and  1886  were  the  worst 
that  have  been  experienced  in  the  period  commencing 
with  1878.  A  subject  of  such  transcendent  impor* 
tance  and  affecting  so  intimately  the  material  interests 
of  nations  and  individuals  naturally  attracted  great 


< 


B.    ROSEWATEr.  478 

and  continually  increasing  attention  throughout  the 
civilized  world.  Investigation  undertaken  by  com- 
mittees of  congress  and  by  royal  British  commissions 
ascribe  the  general  industrial  depression :  First,  to 
changes  in  the  distribution  of  wealth ;  second,  a  nat* 
Ural  tendency  to  diminution  in  the  rate  of  profit  con- 
sequent on  the  progressive  accumulation  of  capital; 
third,  industrial  overproduction  and  impairment  of 
agricultural  industry  consequent  on  bad  seasons  and 
the  competition  of  the  products  of  other  soil  which  can 
be  cultivated  under  more  favorable  conditions.  The 
loss  in  British  farming  lands  is  computed  at  over  $800,- 
000,000.  In  France  the  principal  causes  assigned  are 
excessive  speculation  prior  to  1873,  followed  by  bad 
crops,  the  great  falling  off  in  the  production  of  wine 
through  the  destruction  of  the  vineyards,  which  is 
estimated  at  over  $2,000,000,000,  a  sum  nearly  double 
the  amount  of  the  war  indemnity  of  1871,  and  general 
overproduction  of  manufactured  products. 

The  concensus  of  opinion  among  the  ablest  writers 
and  thinkers  is,  however,  that  the  chief  cause  of  the 
depressiv^n  within  the  past  quarter  of  a  century  must 
be  traced  to  the  marvelous  changes  that  have  taken 
place  through  the  introduction  of  machinery  and  the 
appliances  of  steam,  electricity  and  natural  gas  to  the 
production  of  articles  in  every  branch  of  industry,  the 
consequent  displacement  of  large  numbers  of  workmen, 
and  last  but  not  least,  to  the  cheapening  of  transporta* 
tion  and  increased  facilities  afforded  for  the  conveyance 
of  products  from  one  country  to  the  other.  The  re- 
motest parts  of  the  earth  have  been  brought  near  to 
each  other  by  the  steamship  and  the  railway,  and 
countries  separated  by  great  oceans  and  thousands  of 


474  SILVER  AND  GOLD. 

mfles  apart  are  now  competiDg  actively  in  the  marts  of 
the  world. 

Liet  us  take  a  glance  at  some  of  our  own  products. 
It  is  to  be  noted  that  in  very  few  branches  or  produc- 
tions have  greater  improvements  been  made  and  adopted 
in  recent  years  than  the  growing  of  wheat.  On  many 
large  ranches  in  California  steam  plows  are  used  and  on 
others  gang  plows  which  turn  six  furrows  and  are 
drawn  by  from  eight  to  fourteen  mules.  Not  infre* 
quently  plows  are  run  in  straight  lines  a  distance  of 
from  six  to  eiglit  miles.  A  patent  machine  for  sowing 
seed  is  employed  by  means  of  which  it  is  claimed  that 
one  man  and  a  team  can  sow  one  hundred  acres  of 
grain  a  day.  Under  such  conditions  wheat  can  be 
raised  in  California  at  a  cost  of  70  cents  per  hundred 
or  42  cents  per  bushel.  In  1881  the  two  Dakotas  with 
150,000  square  miles  did  not  produce  a  single  bushel 
of  wheat  for  export.  In  1892  Dakota  exported  80,704,- 
000  bushels,  or  nearly  as  much  as  the  annual  export 
from  India  since  1880,  wliich  has  been  primarily  re< 
sponsible  for  the  decline  of  recent  years  in  the  world's 
average  price  of  wheat.  In  1887  Dakota's  crop  wasr 
62,500,000  bushels,  or  one-seventh  of  the  total  wheat 
product  of  the  United  States ;  in  1890-91  Dakota  crops 
went  down  to  87,000,000  bushels,  but  this  was  owing 
to  a  shortage  in  the  crop. 

Australia  and  New  Zealand  are  becoming  sharp 
competitors  in  the  wheat  market,  having  changed  their 
Bheep  ranches  to  wheat  lands.  Previous  to  1878  India 
exported  little  or  no  wheat  to  Europe,  owing  to  th« 
high  cost  of  freight  and  the  export  duties ;  in  1881  the 
freight  from  Calcutta  to  London  was  60  shillings  per 
ton;  in  1886  freight  had  declined  to  80  shillings  per 


E.  ROSEWATEB.  475 

ton  or  S7|  cents  per  hundred  pounds.  That  brought 
Indians  cereal  into  active  competition  with  American 
wheat  in  London. 

Laws  of  supply  and  demand  naturally  are  the  prime 
regulators  of  prices.  From  250,000,000  bushels  of 
wheat  raised  in  the  United  States  in  1872  the  crop 
of  wheat  steadily  advanced  until  it  was  512,000,000 
bushels  in  1884  and  477,000,000  in  1886.  In  1849  the 
United  States  produced  four  and  one-third  bushels  of 
wheat  per  inhabitant;  in  1859,  five  and  one- twentieth 
bushels,  in  1869,  seven  and  one-half  bushels;  in  1876, 
nine  and  one-tenth,  and  the  same  in  1884.  In  thirty- 
four  years,  from  1849  to  1885,  the  increase  of  popula- 
tion was  141  per  cent. ;  the  increase  of  wheat  produc- 
tion 410  per  cent.  That  explains  why  the  price  of 
wheat  has  been  gradually  receding.  The  same  applies 
to  the  production  and  price  of  cotton. 

If  those  who  take  a  despondent  view  of  the  great  in- 
dustrial depression  and  marked  decline  in  prices  would 
ponder  and  reflect  they  would  discover  a  silver  lining 
behind  the  dark  cloud.  The  general  decline  in  prices 
all  over  the  world  has  placed  the  wage-worker  within 
the  reach  of  articles  and  commodities  that  formerly 
were  luxuries  within  reach  of  the  wealthy  only.  While 
prices  have  gone  down  80  per  cent.,  wages  have  gone 
down  only  from  5  to  10  per  cent,  since  1873,  and  the 
laborer  can  save  more  on  present  wages  than  he  did 
during  the  inflation  period  after  the  war,  and  his  money 
will  go  further  than  it  ever  did  before.  The  savings 
banks  in  all  our  large  cities  attest  the  fact  that  the 
;  wage-worker  has  not  fared  badly  by  the  drop  in  prices, 
J  and  the  laborer  is  vitally  concerned  in  keeping  the  pup 
chasing  price  of  the  dollar  as  large  as  it  is  now,  unless^ 


*-  ^ 


/  tit 


476  SILVER   AND  GOLD. 

be  can  secure  an  advance  of  wages  to  correspond  to  any 
lessening  value.  The  cheapening  of  food,  clothings 
furniture,  fuel  and  rents  have  enabled  the  men  of  small 
means  to  live  comfortably,  and  their  savings  go  a  great 
deal  further  than  they  ever  did  before.  The  decline  in 
prices  enables  men  of  moderate  means  to  carry  on  busi- 
ness with  small  capital.  While  the  farmer  has  been 
seriously  affected  by  the  decline  in  food  product  prices, 
he  also  has  had  the  benefit  of  cheaper  sugar,  cheaper 
lumber,  cheaper  clothing,  cheaper  furniture  and  the 
cheapening  of  all  commodities  he  has  to  buy.  The  fall 
of  30  per  cent,  in  the  price  of  all  commodities  the  world 
over  has  enabled  the  commercial  and  industrial  w^orld 
to  do  business  with  one-third  less  currency.  In  fact, 
the  rapid  exchange  that  now  takes  place  by  rail,  express 
and  the  telegraph  in  the  mercantile  world  has  mater- 
ially lessened  the  demand  for  ready  money.  Twenty- 
five  years  ago  it  took  a  small  fortune  to  stock  a  first* 
class  dry  goods  store.  Now,  with  calico  at  four  cents 
a  yard  and  all  merchandise  at  one-fourth  of  war  prices, 
the  dry  goods  merchant  is  in  a  position  to  make  a 
splendid  display  on  a  very  moderate  amount  of  capital, 
and  so  with  all  the  other  classes  of  business.  As  a 
natural  consequence,  a  much  smaller  volume  of  money 
is  now  needed  for  the  transaction  of  business  than  when 
prices  were  high.  Abundance  of  the  circulating  medium 
does  not  always  represent  prosperity.  The  Argentine 
Republic,  with  2,000,000  of  people,  had  $6,000,000  of 
metallic  money  and  $379,000,000  of  greenbacks  in  1880, 
or  f  189.70  per  capita ;  but  at  the  end  of  nine  years  her 
greenbacks  became  almost  worthless  and  the  country 
was  thrown  into  a  state  of  general  bankruptcy. 
The  advocates  of  free  and  unlimited  coinage  of  silver 


E.   ROSEWATEE.  477 

point  to  the  panic  of  1898  and  the  intensiried  commer- 
cial and  industrial  disasters  in  the  United  States,  as  the 
culmination  of  the  so-called  crime  of  1873.  As  a  mat- 
ter of  fact  the  disastrous  collapse  of  1893  is  chiefly  due 
to  the  crimiA-J-  Dver-capitalization  of  corporate  proper- 
ties  and  the  colossal  frauds  perpetrated  upon  investors. 
While  the  total  debt  of  the  United  States,  including 
bonds  and  greenbacks,  aggregates  a  trifle  more  than 
$1,000,000,000,  and  the  bonded  debt  of  all  the  states, 
counties,  cities  and  school  districts  is  less  than  $1,200,- 
000,000,  the  bonded  debt  of  the  la^avays  of  the  United 
States  is  over  $6,000,000,000.  The  bonded  debt  of  the 
various  industrial  corporations,  including  the  telegraph, 
teleplione,  electric  lighting,  electric  motor,  street  rail- 
ways, water  companies,  gas  companies  and  the  various 
concerns  that  have  been  operated  undar  trusts,  aggre- 
gate $4,000,000,000  more,  and  these  concerns  are 
stocked  for  about  $12,000,000,000.  The  bulk  of  all 
this  capitalization  represents  fraud  in  Its  mott  glaring 
form.  Construction  companies  and  Credit  Mobilier 
rings  under  the  sanction  of  state  and  kiational  legisla- 
tion, exploited  the  investors  and  robbed  each  other  un- 
til the  balloon  collapsed  and  precipitated  general  disas- 
ter upon  the  whole  country.  Some  of  the  biggest 
frauds  have  been  perpetrated  by  the  billionaires  of  the 
mining  states,  who  flooded  the  stock  exchanges  of  New 
York,  London  and  Paris  with  billions  of  imaginary 
wealth.  These  are  the  true  causes  of  the  terrible 
shrinkage  in  values,  and  the  remedy  must  be  directed 
to  the  prevention  of  the  recurrence  of  such  frauds. 
The  shrinkage  in  the  price  of  silver  is  but  a  drop  in 
the  ocean  when  compared  to  the  destruction  of  credits. 
The  aggregate  commerce  of  the  United  States  is  com- 


J 

1 


4T8  SILVER  AND  GOLD. 

puted  to  represent  $60,000,000,000  a  year.     Of  these 
exchanges,  98  per  cent,  are  credits,  and  2  per  cent,  pri- 
mary money,  gold  and  silver.     For  every  dollar  in  sil- 
ver circulated  in  our  exchanges  struck  down  by  demon- 
etization, $98  of  credits  were  struck  d.  ..*.  by  fictitious 
and  fraudulent  capitalization.    We  have  destroyed  ^8,* 
000,000,000  of  credit,  and  cannot  hope  to  restore  confi- 
dence and  prosperity  by  paying  100  cents  for  61  cents' 
worth  of  silver.     We  cannot  talk  of  the  crime  of  1873 
and  ignore  the  crimes  that  preceded  1873.     In  1492  the 
relative  value  o^  o^./er  to  gold  was  as  10|  to  1.     In 
1760  the  ratio  stood  14 J  to  1.     Here  was  a  shrinkage 
of  38  per  cent,  in  the  value  of  silver.     Who  committed 
that  crime  and  why  did  silver  shrink  38  per  cent,  in 
spite  of  its  free  coinage  by  all  the  nations  ?     In  1793, 
thirty-two  years  later,  silver  had  depreciated  further  to 
the  ratio  of  15  to  1,  or  a  shrinktige  in  thirty-two  years 
of  6  per  cent.  more.     In  1813  the  ratio  was  16  J  to  1,  or 
a  further  sln*inkage  of  8  per  cent.    The  total  shrinkage, 
therefore,  in  the  relative  value  of  silver  to  gold  between 
1492  and  1813  was  51  per  cent.     Silver  bullions  worth 
f  1  at  the  time  of  the  discovery  of  America  was  worth 
only  49  cents  in  1813,  and  in  the  face  of  this  tremen- 
dous shrinkage  the  world  prospered  in  its  industrial  and 
commercial  intercourse.     Prices  of  commodities  went 
up  and  wages  were  higher  than  they  had  been  at  the 
time  of  the  discovery  of  America.     It  is  charged  that 
silver  was  demonetized  for  the  purpose  of  reducing  the 
value  of  the  property  of  the  land  owner,  and  for  thi 
purpose  of  reducing  the  value  of  wages  of  the  labor» 
ing  man.     Money  has  two  qualities;  purchasing  powei 
or  exchangeability  for  other  products,  and  the  produo 
tive  power  of   earning  an  income  for  itself  by  use- 


B.  ROSEWATEB.  479 

Making  money  dearer  means  raising  the  price  for  its 
use,  but  money  is  cheaper  in  the  United  States  now 
than  it  ever  has  been.  The  purchasing  power  of  money 
is  greater  than  it  ever  has  been  and  the  value  of  wages 
is  greater  than  it  ever  has  been,  because  the  laborer 
can  buy  more  of  the  necessaries  of  life  with  his  wages 
than  he  ever  could  before.  The  true  standard  of  values 
is  labor,  and  measured  by  that  standard  our  present 
money  has  not  changed  materially  from  the  standards 
that  prevailed  up  to  the  war.  In  fact,  labor  commands 
higher  wages  in  1895,  in  spite  of  all  depression,  than  it 
did  in  the  period  of  sixty  years  preceding  the  war. 
Prior  to  1861  the  common  laborer's  wages  was  75  cents 
to  $1  a  day.  To-day  the  common  laborer  earns  from 
$1.25  to  $1.50  per  day,  and  the  best  mechanic,  who  did 
not  earn  over  Jf2,50  per  day  prior  to  1860,  now  earns 
from  $2.50  to  $4  per  day,  and  that  for  eight  hours' 
work,  instead  of  ten  to  twelve  hours'  work  as  formerly. 


480  SILVER   AND  GOLD. 


CHAPTER  XXVIII. 

BT  JOHN  G.  CABLISLE,  8ECRBTABY  OF  THE  TBEASUBT. 

The  proposition  to  revolutionize  our  monetary  sys« 
tern  and  thus  destroy  the  credit  of  the  government 
and  the  people  at  home  and  abroad,  violate  the  obliga- 
tions of  all  contracts,  unsettle  all  exchangeable  values, 
reduce  the  wages  of  labor,  expel  capital  from  our 
country,  and  seriously  obstruct  the  trade  of  our  people 
among  themselves  and  with  the  peoples  of  other  coun- 
tries, is  one  which  challenges  the  intelligence,  patriot- 
ism, and  commercial  honor  of  every  man  to  whom  it  ia 
addressed.  No  matter  what  may  be  the  real  purposes 
and  motives  of  those  who  make  the  proposition  to 
legalize  the  free  and  unlimited  coinage  of  silver  at 
the  ratio  of  16  to  1,  these  are  the  consequences  involved 
in  their  schema,  and,  in  my  opinion,  they  cannot  be 
avoided  if  it  should  be  adopted. 

I  do  not  charge  that  our  fellow- citizens  who  propose 
to  revolutionize  our  monetary  system  by  a  sudden 
clijinge  in  the  standard  of  value  really  desire  to  see  the 
business  of  the  country  ruined,  or  even  injured,  or  that 
t  hey  believe  any  injurious  consequences  would  follow 
the  adoption  of  their  policy,  but,  in  my  judgmeiit,  the 
results  would  be  most  disastrous  to  the  material  inter- 
ests of  all  the  people  in  eveTy  part  of  the  country,  and, 
therefore,  I  shall  appeal  to  them  carefully  to  review  the 
grounds  upon  which  their  opinions  have  been  formed 
before  it  is  too  late  to  correct  a  possible  mistake  upon 


JOHN  Q.   CABLISLB.  481 

a  subject  of  such  supreme  importance  to  themselves  and 
to  their  posterity.  It  is  not  necessary  to  impeach  their 
motives  in  order  to  answer  their  arguments,  nor  would 
it  be  wise  or  proper  to  underestimate  the  intellectual 
and  material  forces  beljiiid  this  great  popular  move- 
ment in  the  South  and  West,  a  movement  which  now 
seriously  threatens  to  disrupt  existing  political  organi- 
zations and  reform  party  lines;  but,  no  matter  what 
may  be  the  motives  or  the  present  numerical  strength 
of  our  opponents  in  this  controversy,  the  merits  of  the 
policy  they  propose  to  inaugurate  must  be  subjected  to 
the  tests  of  reason  and  experience,  and  if  it  is  i-hown 
to  be  impracticable,  or  fundamentally  wrong  in  princi- 
ple, we  may  be  confident  that  it  will  not  finally  com- 
mand the  support  of  a  majority  of  our  people. 

Before  proceeding  to  the  discussion  of  the  main 
question  presented,  it  may  be  advantageous  to  state  as 
briefly  as  possible  a  few  admitted  or  well-established 
facts  having  an  important  bearing  upon  it.  From  the 
earliest  times  gold  and  silver  have  been  used  as  money, 
not  because  there  was  at  the  beginning  any  law  declar- 
ing  them  to  be  money,  but  because,  by  reason  of  their 
limited  and  regular  supply,  their  great  value  as  com- 
pared with  other  things  in  proportion  to  weight  and 
bulk  and  their  durability,  they  were  more  stable  and 
convenient  than  any  other  commodity  as  measures  of 
value  in  making  exchanges.  Consequently,  these  me- 
tals were  used  as  money  by  common  consent  of  the 
people  for  centuries  before  there  was  any  law  upon  the 
subject  or  any  coins  in  existence ;  they  passed  by 
weight,  and  their  values  in  effecting  exchanges  were  de- 
termined by  the  quantity  of  pure  metal  contained  in 
each  piece.     Each  metal  had  a  distinct  value  of  its  own^ 


482  SILVEU   AND  GOLD. 

and  when  it  was  used  in  trade  neither  the  buyer  nor 
seller  troubled  himself  about  the  ratio  between  it  and 
the  other  metal.  The  laws  of  trade  fixed  and  regulated 
the  actual  and  relative  values  of  both  metals  in  the 
purchase  and  sale  of  other  commodities,  just  as  they  do 
now.  They  had  been  used  as  money  several  centuries 
before  any  government  undertook,  by  royal  proclama- 
tion or  statute  law,  to  establish  a  ratio  between  them, 
and,  when  this  character  of  legislation  was  first  begun, 
the  public  authorities  did  not  attempt  to  establish  new 
values  or  new  ratios,  but  accepted  those  alread}^  fixed 
by  the  laws  of  trade  and  the  custom  of  merchants. 
Coins  were  made,  not  for  the  purpose  of  attempting  to 
add  anything  to  the  intrinsic  or  exchangeable  value  of 
the  metal  contained  in  them,  but  for  the  purpose  of  at- 
testing, by  public  authority,  its  weight  and  purity,  thus 
avoiding  the  delay  and  uncertainty  resulting  from  the 
practice  of  weighing  each  piece  as  it  passed  from  one  to 
another.  That  the  coinage  of  the  metals  does  not  now 
add  anything  to  their  actual  value  in  the  commercial 
world,  is  conclusively  proved  by  the  facts  that,  in  all 
the  great  transactions  between  the  people  of  different 
countries,  the  coins  are  accepted  only  at  their  bullion 
value,  determined  by  their  actual  weight  and  fineness, 
and  that  bullion  itself  is  still  used  in  making  payments, 
just  as  it  was  thousands  of  years  ago.  Whatever  ef- 
fect legislation  upon  the  ratios,  in  connection  with  le- 
gal  tender  laws,  may  have  had  upon  the  use  of  the  two 
metals  in  the  payment  of  antecedent  debts,  it  has  never 
had  the  slightest  effect  upon  the  actual  or  relative 
values  of  the  two  metals  in  national  or  international 
trade.  For  many  centuries,  even  after  the  commerce 
of  the  world  had  grown  to  enormous  proportions,  the 


JOHN  O.  GABLISLE.  483 

ipropriety  of  making  any  given  quantity  of  bullion,  or 
iny  particular  coin,  a  legal  tender  was  not  even  sug- 
gested, and  up  to  the  present  time  there  is  no  legal 
tender  in  international  trade.  Whether  payments  are 
made  in  gold  or  silver  coins,  or  in  gold  or  silver  bullion, 
actual  intrinsic  value  determines  the  amount  or  quantity 
to  be  delivered,  no  matter  what  may  be  the  legal  ten- 
der laws  of  the  different  countries,  and  no  matter 
though  they  may  have  the  same  or  different  ratios  of 
value  between  the  metals  within  their  respective 
limits.  The  law  of  France,  for  instance,  places  a  higher 
value  upon  silver  relatively  to  gold  than  is  placed  upon  it 
by  the  laws  of  the  United  States,  the  French  ratio  being 
15  J  to  1,  and  ours  being  16  to  1 ;  but  if  16  pounds  of  our 
silver,  coined  or  uncoined,  were  sent  to  that  country  to 
be  used  in  the  payment  of  a  debt  or  in  the  purchase  of 
commodities,  it  would  not  be  accepted  at  the  ratio  of 
15 J  to  1,  or  at  the  ratio  of  16  to  1  as  compared  to  gold, 
but  only  at  the  ratio  of  about  82  to  1,  which  shows  that 
neither  our  ratio  nor  the  French  ratio  has  any  effect 
whatever  upon  the  value  or  purchasing  power  of  the 
metal  itself.  Coinage  is  free  in  Mexico,  and  the  dollar, 
which  is  full  legal  tender,  contains  377.17  grains  of 
pure  silver,  while  our  dollar  contains  only  371.25  grains 
of  pure  silver;  yet  Mexican  silver  dollars  are  sent  into 
the  United  States  and 'other  parts  of  the  world  and  sold 
at  the  price  of  the  bullion  contained  in  them,  which  ii* 
about  one-half  their  nominal  or  legal  value  in  their  own 
country.  The  legal  tender  laws  affect  the  debt-paying 
power  of  the  coin  itself  in  the  country  where  the  law.s 
prevail,  but  the  laws  establishing  ratio  do  not  affect  the 
value  of  the  metal  contained  in  the  coins  either  at  home 
or  abroad,  because  it  is  the  metal  that  fixes  the  value 


i 


484  SILVBR  AND  GOLD. 


of  the  coin,  and  not  the  coin  that  fixes  the  value  of  the 
metal. 

For  a  long  time,  during  the  early  history  of  the 
world,  and  even  during  the  medieval  age,  gold  aud 
silver,  in  bullion  or  in  the  form  of  coins,  constituted 
almost  the  entire  circulation  among  the  people,  even  in 
the  nations  most  advanced  in  trade  and  civilization, 
and,  consequently,  the  quantity  of  these  metals  that 
could  be  procured  and  kept  in  use  was  a  question  of 
far  greater  importance  then  than  it  is  now  or  ever  can 
be  in  the  future.  When  life  and  property  had  been 
made  reasonably  secure  by  the  establishment  of  stable 
governments,  and  regular  processes  were  authorized 
for  the  enforcement  of  pecuniary  obligations,  credit  or 
confidence  largely  took  the  places  of  bullion  and  coin 
in  the  commercial  transactions  of  the  people,  and  a 
much  smaller  amount  of  metallic  money  was  required 
in  proportion  to  the  whole  volume  of  business  dona 
than  had  been  required  before.  The  use  of  credit  in 
the  form  of  bank  notes,  checks,  bills,  and  other  evi- 
dences of  debt  has  so  increased  in  modern  times  that 
in  all  highly  organized  commercial  communities  the 
use  of  coin,  except  in  making  change,  has  been  almost 
entirely  dispensed  with.  The  percentage  of  coin  ac- 
tively employed  in  conducting  business  in  this  country 
is  so  small  that  it  is  almost  inappreciable ;  so  small,  in 
fact,  that  its  disuse  in  our  transactions  would  not  be  ^ 

felt  if  we  had  a  substitute  for,  or  a  paper  representa-  ^ 

tive  of,  the  subsidiary  pieces.  In  England,  France, 
and  some  other  countries,  a  larger  amount  of  coin  ia 
used,  because  they  have  no  very  small  notes. 

Although  we  have  the  gold  standard,  or  measure  of 
value,  in  this  country,  our  actual  stock  of  gold  bullion 


JOHN   O.   CARLISLE.  486 

ftnd  coin  auiounts  to  only  about  one-third  of  our  actual 
currency — a  condition  of  affairs  which  would  have 
been  inconceivable  a  few  centuries  ago.  We  have 
about  $626,000,000  in  gold,  $897,662,878  in  full  legal 
tender  silver,  $346,681,000  in  old  United  States  notes, 
$149,684,471  in  treasury  notes  issed  in  the  purchase  of 
silver  bullion,  $209,719,860  in  national  bank  notes,  and 
$76,169,669  in  subsidiary  silver  coin,  making  in  all 
$1,804,707,763,  exclusive  of  the  minor  coins,  and 
every  dollar  of  this  vast  volume  of  currency  is  kept 
equal  in  value  to  the  ^standard  established  by  law,  so 
that  every  man  who  receives  a  silver  dollar  or  paper 
dollar  in  exchange  for  his  products,  or  in  satisfaction 
of  a  debt,  gets  just  as  good  a  dollar  as  the  man  who 
receives  gold.  This  is  the  monetary  system,  and  this  is 
the  financial  condition  which  the  advocates  of  free 
coinage  at  the  ratio  of  16  to  1  now  propose  to  revolu- 
tionize at  once  by  a  change  in  the  standard  of  value, 
so  that  the  whole  mass  of  circulation  left  for  the  use 
of  the  people  would  be  reduced  to  about  one-half  the 
purchasing  power  it  has  now ;  or,  in  other  words,  so 
that  it  would  require  about  double  the  amount  of  cur- 
rency that  is  required  now  to  perform  the  same  service 
in  the  exchange  of  commodities.  But  the  consumma- 
tion of  such  a  policy  would  produce  results  more  far- 
reaching  and  disasti'ous  than  the  mere  reduction  of  the 
standard  of  value,  because,  for  a  long  time,  at  least, 
credit,  which  constitutes  by  far  the  most  important 
factor  in  our  financial  and  commercial  transactions, 
would  be  substantially  destroyed  by  the  confusion  and 
uncertainty  necessarily  following  such  a  great  and  sud* 
den  change  in  our  monetary  system. 
But  it  is  contended  by  a  large  number  of  the  advo- 


486  HILVEB  AND  GOLD. 

cates  o!  free  coinage — perhaps  a  majority  of  them — 
that  the  effect  of  their  policy  would  be,  not  to  abolish 
the  present  standard  of  value  and  substitute  the  single 
silver  standard  in  its  place,  but  that  it  would  establish 
what  they  call  bimetallism  and  a  double  standard.  I 
confess  my  inability  to  understand  what  is  really 
meant  by  a  double  standard  or  measure  of  value ;  the 
idea  is  incomprehensible  to  my  mind,  because  I  cannot 
conceive  how  it  is  possible  to  have  two  different  legal 
and  authoritHtive  measures  of  the  same  thing  in  use  at 
the  same  time,  as,  for  instance,  a  pound  weighing  six- 
teen ounces  and  a  pound  weighing  eight  ounces,  or 
only  half  ^s  much,  and  both  declared  by  law  to  be 
legal  pou/*ds.  I  agree  entirely  with  Gen.  Jackson's 
Secretary  of  the  Treasury,  who  said,  "  The  proposition 
that  then  can  be  but  one  standard  in  fact  is  self-evi- 
dent.'' The  proposition  to  establish  and  maintain  two 
differant  measures  of  value  to  be  in  use  at  the  same 
time,  and  to  be  applied  to  the  same  things  at  the  same 
time,  embodies  a  physical  and  metaphysical  absurdity, 
and  this  is  so  evident  that  the  ablest  thinkers  and 
writers  upon  the  subject  have  been  at  last  forced  to 
abandon  it.  Prof.  Francis  A.  Walker,  one  of  the  most 
distinguished  bimetallists  in  the  United  States  or  in 
the  world,  in  a  carefully  prepared  paper  recently  pub- 
lished, says : 

*^  But  one  thing  more  remains  to  be  said  in  this  con- 
nection ;  that  is,  in  replv  to  the  allegation  of  the  mono- 
metallist  writers  that  the  course  of  events  in  France 
which  has  been  recited  did  not  constitute  a  genuine 
case  of  bimetallism.  If  these  writers  may  be  permitted 
to  impose  their  own  definition  upon  us,  their  conten* 
tion  can  to  a  considerable  extent  be  made  good*    What 


STEPHEN  B.    ELKINS. 


JOHN   G.   CARLISLE.  489 

tkey  say  is,  that  France  from  1803  to  1873  did  not  en- 
joy the  concurrent  circulation  of  the  two  metals,  but 
only  an'  alternpt^  circulation,  now  of  one  and  now  of 
the  other ;  and  this,  they  declare,  is  not  bimetallism  at 
all.  Therefore,  according  to  their  view,  there  is  no 
great  historical  instance  of  the  success  of  bimetallism. 
**If,  on  the  other  hand,  we  may  be  permitted  for  our- 
selves to  say  what  we  mean  and  propose  by  bimetallism, 
the  criticism  in  question  does  not  touch  our  case  at  all. 
We  flatly  deny  th^t  bimetallism  necessarily  involves 
the  concurrent  circulation  of  the  two  metals.  There 
is  some  reason  to  believe  that  the  French  statesmen  of 
1803  really  expected  that  concurrent  circulation  would 
result ;  but  no  bimetallit^t  nowadays  makes  the  concur- 
rent circulation  of  the  ftwo  metals  in  the  same  country 
a  necessity  of  that  system^  If  it  results  only  in  estab- 
lishing an  alternating  circulation,  the  chief  results  of 
bimetallism  will  still  be  achieved,  as  they  were  by  the 
action  of  France.'* 

This  is  intelligible,  for  we  can  all  understand  how  it 
is  possible  to  have  an  alternatiug  standard  and  circula- 
tion, sometimes  gold  and  sometimes  silver,  and  the 
monetary  history  of  the  world,  proves  that  this  is  just 
what  happens  whenever  the  two  metals  are  freely 
coined  in  any  country  and  made  full  legal  tender. 
Values  will  always  be  measured  b^  the  kind  of  money 
in  actual  circulation,  no  matter  whr t  the  law  may  de- 
clare, and,  therefore,  if  the  free  and  unlimited  coinage 
of  silver  at  the  ratio  of  16  to  1  should  drive  out  gold 
and  substitute  silver  and  paper  redeemable  in  silver  in 
its  place,  we  should  have  a  single  silver  standard  and 
actual  silver  monometallism.  Instead  of  using  both 
gold  and  silver  as  we  do  now  in  larger  amounts  than 
ever  before  in  our  history,  we  should  instantly  expel 
the  more  valuable  metal  from  the  country  and  mak9 
28 


490  SILVER   AND   GOLD, 

the  other  the  sole  basis  of  our  currency.  We  have  nc^^ 
practical  bimetallism — the  use  of  both  metals  as  monty ; 
we  should  have  then  practical  monometallism — the  use 
of  only  one  metal  as  money.  This  is  neither  specula- 
tion nor  prophecy,  but  a  conclusion  based  on  facts  es- 
tablished by  the  experience  of  all  nations  in  aH  ages. 

In  order  to  eliminate  all  irrelevant  matter  and  sim- 
plify the  argument,  allow  me  to  state  exactly  what  the 
proposition  now  pending  before  the  people  is:  It  is 
proposed  that  the  United  States,  without  the  co-opera- 
tion or  assistance  of  any  other  government,  shall  pro- 
vide by  law  that  all  the  silver  bullion,  or  foreign  silver 
coins,  that  may  be  presented  at  the  mints  by  individuals 
or  corporations,  foreign  or  domestic,  shall  be  coined,  at 
the  public  expense,  into  silver  dollars,  at  the  ratio  of 
16  to  1  with  gold — that  is,  that  sixteen  poinds  of  silver 
shall  be  considered  equal  in  value  to  one  pound  of  gold, 
and  the  weights  of  the  coins  shall  be  adjusted  accord- 
ingly— and  that  the  coins  so  made  at  the  public  ex- 
pense shall  be  delivered  to  the  owners  of  the  bullion, 
or  foreign  silver  coins,  as  the  case  may  be,  and  all  the 
people  of  the  United  States,  but  nobody  else,  shall  be 
compelled  by  law  to  receive  them  as  dollars  of  full 
value,  in  the  payment  of  debts  due  to  them  from  their 
own  fellow-citizens  and  from  the  citizens  or  subjects  of 
other  countries.  It  is  not  proposed  that  the  citizens  or 
subjects  of  other  countries,  with  whom  our  people  trade, 
shall  be  compelled  to  receive  these  silver  dollars  in  their 
transactions  with  us,  because  that  can  be  done  only  by 
international  agreement,  and  our  impatient  free-coinage 
friends  declare  their  determination  to  proceed  at  once 
independently  of  all  other  governments.  All  who  are 
indebted  to  us  are,  therefore,  to  have  the  privilege  of 


JOHN  e.  CARLISLE.  491 

paying  iu  silver,  while  all  to  whom  we  shall  become  in- 
debted are  to  have  the  privilege  of  requiring  us  to  pay 
in  gold. 

Measured  by  their  purchasing  power  in  the  markets 
of  the  world,  which  is  the  only  real  test,  the  relative 
value  of  silver  bullion  to  gold  bullion  is  about  r>2  to  1 ; 
that  is,  it  requires  in  all  countries,  silver  standard 
countries  as  well  as  gold-standard  countries,  about  32 
pounds  of  silver  bullion  to  procure  the  same  quantity 
of  commodities  that  one  pound  of  gold  bullion  will 
procure,  and,  tlierefore,  the  proposition  to  authorize  the 
free  and  unlimited  coinage  of  silver  into  full  legal  ten- 
der money  at  the  ratio  of  16  to  1  means,  under  exi»t- 
in:;  conditions,  that  the  intrinsic  value  of  the  silver 
dollar  sliall  only  be  half,  or  about  half,  the  intrinsic 
value  of  the  gold  dollar.  My  own  opinion  is  that  after 
we  had  passed  a  certain  limit  the  more  silver  dollars  we 
coined  the  less  they  would  be  worth,  because  the  infla- 
tion itself  would  still  further  diminish  their  purchasing 
power.  Such  legislat;on  by  the  United  States  alone 
would  not  reduce  the  value  of  the  gold  dollar  to  any 
extent  whatever,  because,  as  already  stated,  the  value 
of  that  metal  in  commercial  transactions  all  over  the 
world  is  estimated  according  to  its  weight  and  fineness, 
and  will  continue  to  be  so  estimated,  and  consequently 
the  only  way  in  which  this  country  alone  could  dimin- 
ish the  value  of  its  gold  dollar  would  be  to  reduce  the 
weight  of  the  pure  metal  contained  in  it. 

The  attempt  to  coin  the  two  metals  without  limit  as 
to  amount  into  full  legal  tender  money  and  keep  both 
in  circulation  at  the  same  time  has  been  made  by  nearly 
every  civilized  nation  in  the  world  and  has  failed  in 
every  one  of  them.     It  h;iB  failed  because  in  every  in- 


492  SILVER  AND  GOLD. 

stance  it  has  been  found  impossible  to  establisii  kikS 
maintain  a  legal  ratio  corresponding  at  all  times  with 
the  intrinsic  or  commercial  ratio  between  the  two 
metals  contained  in  the  coins,  and  because  whenever 
either  of  the  metals  was  undervalued  relatively  to  the 
other  in  the  coinage  laws  it  was  expelled  from  the 
country.  England  persisted  in  the  attempt  for  nearly 
five  hundred  years  and,  notwithstanding  the  enactment 
of  most  severe  penal  statutes  against  the  exportation  of 
coins  or  bullion,  was  at  last  forced  to  abandon  the  effort 
and  adopt  the  single  standard.  France,  in  her  efforts 
to  keep  the  coins  of  the  two  metals  in  circulation  at 
the  same  time,  changed  the  legal  ratio  between  them 
more  than  one  hundred  and  fifty  times  in  a  single  cen- 
tury, and  finally,  in  1876,  finding  that  gold  was  leaving 
her  and  that  in  ten  years  her  net  imports  of  silver  had 
amounted  to  f  280,000,000,  stopped  the  coinage  of  legal 
tender  silver,  and  for  nineteen  years  the  attempt  has 
been  abandoned  in  that  country.  Many  other  nations 
in  Europe  and  other  parts  of  the  world  have  subjected 
their  people  to  great  loss  and  expense  by  their  adher- 
ence to  monetary  systems  based  upon  the  theory  that  a 
double  standard  could  be  maintained,  but  in  no  case 
have  they  succeeded  in  keeping  the  coins  of  the  two 
metals  in  use  at  the  same  time,  except  for  very  short 
periods.  Our  own  country  is  not  without  experience 
upon  this  subject,  and  the  results  here  were  just  the 
same  as  they  have  been  everywhere  else.  By  the  act 
of  1792,  which  was  our  first  coinage  law,  the  legal  ratio 
between  gold  and  silver  was  fixed  at  16  to  1,  when  in 
fact  the  true  commercial  ratio  was  or  soon  became  about 
15J  to  1,  and  the  result  of  this  very  small  overvalua- 
tion of  silver  in  the  coinage  was  that  gold  went  out  of 


JOHN  G.   CARLISLE.  498 

circulation  and  we  had  practically  silver  monometallism 
until  after  the  passage  of  the  act  of  1884.  For  the 
purpose  of  restoring  gold  to  the  circulation^  congress 
in  1884  changed  the  ratio  from  15  to  1,  to  16  to  1,  and 
as  this  was  an  overvaluation  of  gold  in  the  coinage, 
silver  left  the  country,  and  from  that  time  on  until  1878 
we  had  practically  gold  monometallism,  whenever  we 
had  any  metallic  basis  at  all  for  our  currency. 

It  would  be  a  useless  consumption  of  time  to  go  into 
a  detailed  account  of  the  monetary  legislation  of  this 
and  other  countries,  or  to  show  at  length  how  it  affected 
the  movements  and  use  of  the  two  metals  by  its  re- 
peated failures  to  conform  the  legal  ratio  to  the  actual 
commercial  ratio  between  them.  The  great  and  ira- 
portant  fact  conclusively  established  by  the  history  of 
that  legislation  and  its  effects  upon  the  circulation  of 
the  coins  of  the  two  metals  is,  that  whenever  one  of 
them  is  overvalued  relatively  to  the  other  in  the  coin- 
age laws,  with  free  coinage  or  coinage  upon  equal 
terms,  and  both  are  made  legal  tender,  the  coins  of  the 
undervalued  metal  will  be  driven  out  of  circulation  and 
out  of  use  as  money  in  the  country  where  the  unequal 
valuation  is  made.  The  reasons  for  this  are  perfectly 
plain.  Both  being  legal  tenders,  the  least  valuable 
coiJis  will  always  be  used  in  making  payments,  and  will 
become  the  measures  of  value  in  the  exchange  of  com- 
modities, and  consequently  the  more  valuable  coins  will 
be  hoarded  or  sent  out  of  the  country  into  a  market 
where  their  real  value  will  be  recognized.  Now,  as  this 
is  just  what  has  always  occurred — at  least  in  modern 
times,  when  commercial  relations  between  different 
countries  are  so  intimate  and  the  means  of  transporta- 
tion are  so  rapid  and  cheap— even  when  the  under- 


4M  SILVEB  AND  GOLD. 

valuation  or  overvaluation  amountei'  jO  only  one  or 
two  per  cent.9  I  think  we  are  fully  justified  in  con- 
cluding that  if  the  United  States  alone  should  adopt 
the  policy  c  f  free  and  unlimited  coinage  of  legal  tender 
silver  at  the  ratio  of  16  to  1,  which  would  be  an  over- 
valuation  of  that  metal  to  the  amount  of  100  per  cent., 
all  the  gold  in  the  country  would  be  immediately 
hoarded  or  exported  or  be  held  as  a  commodity  by 
speculators  engaged  in  the  business  of  buying  and  sell- 
ing it  at  a  premium.  If  this  should  be  the  result,  the 
free  coinage  of  silver  would  not  for  a  long  time  add 
anything  whatever,  even  nominally,  to  our  stock  of 
money ;  on  the  contrary,  the  immediate  effect  of  such  a 
policy  would  be  a  contraction  to  the  extent  of  fully 
one-third  of  our  present  volume  of  currency  by  the  ex- 
pulsion of  about  $625,000,000  in  gold,  and  it  would  re- 
quire more  than  fifteen  years  to  supply  its  place  with 
silver  dollars,  even  if  our  mints  coined  nothing  else. 

All  who  have  been  or  may  be  induced  to  give  their 
support  to  this  revolutionary  policy,  upon  the  assurance 
that  it  will  give  the  country  more  money  for  use  in  the 
transaction  of  business,  will  be  greatly  disappointed,  for 
they  will  find,  when  it  is  too  late,  that  instead  of  hav « 
ing  more  money  they  will  have  lessr  and  that  it  will  be 
depreciated  in  value  besides.  The  introduction  into 
the  currency  of  a  country  of  any  kind  of  money  about 
which  there  is  the  least  doubt  will  always  operate  to 
drive  out  the  same  amount,  or  about  the  same  amount^ 
of  better  money  and  thus  leave  the  people  with  sub- 
stantially the  same  volume  of  currency  they  had  at  the 
beginning.  The  act  providing  for  the  purchase  of  sil- 
ver bullion  and  the  issue  of  legal  tender  treasury  noten 
in  payment  for  it  was  passed  on  the  14th  day  of  July^ 


JOHN  Q.  CAltLISLS.  495 

1890,  and  the  purchasing  clause  of  that  act  was  repealed 
November  1,  1893.  While  it  I'emaiued  in  force,  United 
States  treasury  notes  were  issued  to  the  amount  of 
$155,931,002,  and  there  were  many  people  who  believed 
that  this  was  making  a  material  and  permanent  addi- 
tion to  the  volume  of  our  currency ;  but  the  official  rec- 
ords show  that  during  the  same  time  the  net  exports 
of  gold  from  this  country  amounted  to  $103,419,491,  so 
that  the  real  addition  to  our  circulation  accomplished 
by  the  issue  of  near  $156,000,000  of  new  notes  was 
about  fifty -two  and  a  half  million  dollars  during  a  pe- 
riod of  more  than  three  years.  The  mere  apprehension 
that  the  government  would  not  be  able  to  maintain  the 
parity  of  the  two  metals  under  the  policy  inaugurated 
by  that  act,  not  only  discredited  the  new  treasuiy  notes 
themselves,  but  the  whole  volume  of  our  currency,  and 
gold  went  out  about  as  fast  as  the  new  notes  came  in. 
While,  therefore,  it  is  not  at  all  certain  that  free  coin- 
age would  ultimately  make  any  considerable  addition 
to  our  circulation,  it  is  absolutely  certain  that  it  would 
give  us  a  depreciated  and  fluctuating  currency,  and  the 
question  is  whether  the  producers  of  cotton,  wheat, 
corn,  beef,  pork,  oil,  lard,  cheese,  and  other  exportable 
articles  will  be  benefited  or  injured  by  such  a  result. 
It  is  an  axiom  in  trade  that  the  prices  of  exportable 
products  are  fixed  in  the  foreign  market  where  the  sur- 
plus is  sold,  and  are  fixed  in  the  currency  of  that 
country  according  to  its  nominal  value  there.  If  sold 
in  England*  for  illustration,  the  prices  are  fixed  and 
paid  in  pounds,  shillings,  and  pence,  and  not  in  dollars 
and  cents,  and,  consequently,  it  makes  no  difference  to 
the  foreign  purchaser  what  kind  of  currency  the  pro- 
ducer has  at  home.     The  character  or  value  of  the  cur- 


496  SILVER  AN  )   tsrOLD. 

rency  in  use  in  the  producing  country  does  not  affect 
the  price  of  the  article  abroad  to  any  extent  whatever, 
for  the  purchaser  there  trades  in  his  own  market  and 
uses  his  own  currency  in  measuring  values.  The  es- 
tablislicnent  of  a  silver  standard  here  could  not  possibly 
increase  the  price  of  cotton  or  wheat  or  any  other 
American  product  in  Liverpool,  London,  Paris,  or  Ber- 
lin, whatever  effect  it  might  have  upon  the  nominal 
price  in  this  country.  If  our  monetary  system  were  so 
changed  that  it  would  require  two  dollars  to  purchase 
here  the  same  quantity  of  commodities  that  one  dollar 
will  purchase  now,  it  would  not  affect  the  value  or  pur- 
chasing power  of  the  English  pound  sterling,  the  French 
franc,  or  German  mark  in  the  least.  The  only  effect 
would  be  that  the  exchange  would  be  doubled,  and  the 
pound  sterling  instead  of  being  worth  $4,866  in  our 
currency,  as  it  is  now,  would  be  worth  $9,732,  and  when 
our  people  wanted  to  make  a  remittance  to  pay  a  debt 
abroad  they  would  have  to  pay  twice  as  much  in  our 
money  for  the  same  number  of  pounds  as  they  pay 
now,  while  the  foreigner  who  wanted  to  make  a  remit- 
tance to  pay  a  debt  here  would  pay  only  half  as  much 
in  his  money  for  the  same  number  of  dollars  as  he  pays 
now.  But  the  exchange  would  be  in  a  constant  state 
of  fluctuation,  just  as  it  has  been  between  Great  Britain 
and  India  on  account  of  the  changes  in  the  prices  of 
silver  from  day  to  day;  and  the  American  producer 
would  be  compelled  to  pay  for  the  risk  taken  on  ac- 
count of  the  fluctuations  by  receiving  a  less  price  for 
his  cotton,  wheat,  beef,  and  other  articles.  The  farm- 
ers and  planters  do  not  export  their  own  products  but 
they  sell  them  at  home  to  somebody  else  who  sends 
them   abroad,   and  if  the  exchange  is  steady  and  th^ 


JOHN  G.   CARLISLE.  497 

money  in  whicli  he  is  to  pay  for  the  products  has  a  fixed 
value  relatively  to  the  money  in  use  in  the  country 
where  he  expects  to  sell  them,  the  purchaser  here  can 
afford  to  pay  the  highest  price  that  would  leave  him  a 
reasonable  margin  of  profit  in  view  of  the  conditions 
existing  in  the  market  abroad.  In  other  words,  he  has 
to  incur  but  one  risk — the  possible  fall  in  the  price  of 
the  products  abroad ;  but  if  the  currency  here  is  de- 
preciated and  fluctuating,  if  our  money  has  no  fixed 
and  certain  value  relatively  to  the  money  in  use  abroad 
where  he  expects  to  sell  the  products,  there  is  an  addi- 
tional risk  to  be  incurred  which  will  have  great  influ- 
ence in  determining  the  price  he  can  afford  to  pay  the 
producer.  In  addition  to  the  risk  of  a  fall  in  the  price 
of  the  products  abroad,  he  must  incur  the  risk  of  a  rise 
in  the  price  of  silver  between  the  time  of  his  purchase 
and  the  time  when  he  receives  the  proceeds  of  his  sale, 
for  if  silver  rises  in  the  meantime  he  may  not  get  back 
as  many  dollars  as  he  paid  out.  The  producer  must 
pay  for  both  of  these  risks  by  receiving  a  smaller 
price  for  his  commodities,  and  hence  his  prices  will  never 
increase  in  proportion  to  the  actual  depreciation  of  the 
money  in  which  they  are  paid.  To  illustrate  my  mean- 
ing, when  silver  is  worth  60  cents  per  ounce,  the 
bullion  contained  in  a  silver  dollar  is  worth  46.4  cents^ 
but  if  the  price  of  silver  should  advance  to  62  cents  per 
ounce,  the  value  of  the  bullion  contained  in  a  silver 
dollar  would  be  48  cents — an  increase  of  over  8  per 
cent.  Now,  the  price  of  cotton  or  wheat  will  not  rise  in 
proportion  to  the  depreciation  of  the  dollar  in  which  it 
is  to  paid ;  that  is,  the  purchaser  for  export  will  not  pay 
for  it  at  the  rate  of  46.4  cents  for  each  dollar  when  sil- 
ftT  is  worth  60  cents  an  ounce,  because  he  knows  that 


498  SILVER   AND  GOLD. 

silver  may  rise  to  61  or  62  cents  per  ounce  before  he 
can  sell  the  product  abroad  and  get  his  money  for  it, 
and  he  knows  that  if  this  happens  the  gold  he  receives 
abroad  cannot  be  exchanged  for  as  many  silver  dollars  as 
he  paid  the  producer  here.  He  will  not  take  all  this  risk 
upon  himself,  but  will  compel  the  producer  to  bear  it 
by  receiving  a  less  price  for  his  cotton  or  wheat ;  and 
this  argument  applies  with  equal  force  to  all  other  ar- 
ticles. It  is  impossible  to  estimate  accurately  the 
amount  of  loss  which  this  would  inflict  upon  the  Ameri- 
can producers  of  exportable  products,  but  it  would  un- 
doubtedly be  very  great,  as  the  value  of  our  exports  of 
domestic  merchandise  is  nearly  $870,000,000  per  an- 
num, and  a  small  percentage  upon  this  large  sura  would 
very  materially  affect  the  incomes  of  our  producers. 

It  is  argued  that  the  existing  standard  of  value  ought 
to  be  abandoned  because  since  1873  prices  of  commodi- 
ties have  fallen,  and  will  continue  to  fall,  if  the  stand- 
ard is  maintained,  so  that  it  has  been,  and  will  continue 
to  be,  more  and  more  difficult  each  succeeding  year  to 
pay  debts  ;  that  this  fall  in  the  prices  of  all  commodi- 
ties is  attributable  to  the  appreciation  of  gold,  and  that 
the  appreciation  in  the  value  of  gold  has  been  caused 
by  the  alleged  demonetization  of  silver  in  Germany  in 
1871  and  1873,  the  omission  of  the  standard  silver 
dollar  from  the  coinage  of  the  United  States  in  187S, 
and  the  suspension  of  the  coinage  of  silver  by  France 
in  1876.  It  is  true  that  the  prices  of  many  things  have 
fallen  since  1873,  but  it  is  true,  also,  that  the  prices  of 
many  things  had  fallen  long  before  that  date.  The 
assertion  that  the  fall  in  prices  since  1878  is  due  to  the 
appreciation  of  gold  alone  is  based  upon  the  assumption 
that  the  relatiojis  between  supply  and  demand  have  not 


JOHN  O.  CARLISLE.  499 

ch&ngerl,  that  there  has  been  no  diminution  of  the  cost 
of  production  and  distribution,  that  the  facilities  for 
affecting  financial  exchanges  have  not  been  improved, 
and,  in  brief,  that  the  world  has  made  no  progress  in 
the  conduct  of  its  industrial  and  commercial  operations 
For  more  than  twenty  years.  This  assumption  is  so  in- 
i.onsistent  with  well-known  economic  and  historical 
facts  tlnit  it  seems  scarcely  worth  while  to  give  it  a 
serious  consideration.  Reductions  in  the  prices  of  com- 
modities are  generally  due  to  so  many  different  causes 
that  it  is  scarcely  ever  possible  to  ascertain  the  extent 
of  their  separate  influences.  I  presume,  however,  that 
even  tho  most  ardent  advocate  of  free  coinage  would 
be  willing  to  admit  that  the  invention  and  use  of  labor- 
saving  machinery,  the  extension  of  our  railroad  systems, 
the  improv  ;ment  of  our  water-ways  and  the  great  re- 
ductions ih  the  rates  for  carrying  freight,  the  employ- 
ment of  st(  amships,  the  use  of  the  telegraph  on  the 
land  and  under  the  sea,  the  application  of  electricity  in 
the  production  of  light,  heat,  and  power,  the  utilization 
of  by-products  which  were  formerly  wasted,  the  intro- 
duction of  more  economical  methods  in  the  processes  of 
production,  the  wonderful  advance  made  by  our  labor- 
ers in  skill  and  eflBciency,  the  greatly  reduced  rates  of 
interest  paid  for  the  use  of  capital,  and  many  other 
things  which  it  would  require  much  time  to  enumerate 
and  explain,  have  affected  prices  in  some  measure,  at 
least,  and  yet  they  ignore  all  tliese  great  influences  in 
their  argument  upon  the  subject  and  attribute  the  lower 
prices  of  commodities  to  a  single  alleged  and  inadequate 
cause — the  appreciation  of  gold.  I  presume,  also,  that 
our  free  coinage  friends  will  admit  that  if  the  change 
in  prices  ha&  been  caused  entirely  by  the  appreciation 


500  BILYEB  AND  GOLD. 

of  gold,  the  reduction  would  have  affected  all  cliings 
alike,  because  it  cannot  be  denied  that,  in  the  absence 
of  other  influences,  gold  must  bear  the  same  relation  to 
the  price  of  one  article  that  it  bears  to  the  price  of  an- 
other. But  we  do  not  find  that  the  prices  of  all  things 
have  been  reduced  in  the  same  proportion,  nor  do  we 
find  that  the  prices  of  all  things  have  in  fact  been  re- 
duced. A  very  few  illustrations  will  serve  to  show  the 
weakness  of  the  contention  that  the  decline  is  due  alone 
to  the  appreciation  of  gold. 

In  1891, 1892,  and  part  of  1898  I  had  the  honor  to 
serve  on  a  sub-committee  charged  by  the  senate  of  the 
United  States  with  the  duty  of  ascertaining  the  course 
of  prices  and  wages  of  labor  for  as  long  a  period  as  au- 
thentic records  would  enable  us  to  embrace  in  our  in- 
vestigation, and,  after  a  most  thorough  and  impartial 
examination  of  the  subject,  a  report  was  made  which 
fills  four  large  volumes  and  embodies  a  mass  of  infor- 
mation upon  these  subjects  which  cannot  be  found  in 
any  other  official  form.  As  to  the  course  of  prices  and 
wages  the  committee  was  unanimous,  though  there  were 
differences  of  opinion  among  the  members  as  to  the 
causes  that  had  from  time  to  time  produced  the  changes. 
The  prices  of  many  articles  and  the  wages  of  labor  in 
many  occupations  were  ascertained  during  each  year  as 
far  back  as  1840,  and  for  the  purposes  of  comparison 
the  prices  of  commodities  and  the  wages  of  labor  in  the 
year  1860  were  adopted  as  the  standard.  The  sufficiency 
of  the  reasons  for  selecting  that  year  rather  than  any 
other  will  not,  I  think,  be  questioned.  There  were  no 
great  financial  or  other  disturbances  during  that  year, 
business  was  in  a  normal  condition  in  all  parts  of  the 
country;  no  changes  had  been  made  in  the  monetary 


JOHN  G.   CABLISLE.  061 

Bystems  of  the  world  for  many  years,  the  United  States 
was  using  gold  as  the  measure  of  value,  just  as  it  is  uow, 
except  that  there  was  no  legal  tender  silver  in  circula- 
tion as  there  is  now,  the  people  were  prosperous  and 
the  prices  of  commodities  and  the  wages  of  labor  were 
fairly  adjusted  with  relation  to  each  other.  At  the  time 
when  this  investigation  was  made  all  the  legislation  in 
regard  to  silver  now  specifically  complained  of  had  been 
accomplished,  and  if  prices  or  wages  had  fallen  there 
was  as  much  reason  to  attribute  the  reduction  to  that 
legislation  then  as  there  is  now.  Ample  time  had  been 
afforded  for  its  affects,  if  it  had  any,  upon  prices  and 
wages  to  be  felt,  and  the  fact  that  the  investigation  was 
not  made  for  the  purpose  of  influencing  legislation  upon 
the  silver  question  adds  to  the  value  of  its  results. 

In  the  first  place,  the  committee  unanimously  se« 
lected  282  articles  in  common  use  which  it  was  agreed 
constituted  the  great  bulk  of  the  consumption  and  ex- 
penditures of  the  people,  and  these  articles  were  sep- 
arated into  eight  classes  or  groups ;  that  is,  clothes  and 
clothing,  fuel  and  lighting,  metals  and  implements, 
lumber  and  house-building  materials,  drugs  and  chem- 
icals, house-furnishing  goods,  and  miscellaneous  com- 
modities. It  was  found  that  the  prices  of  articles  used 
for  food,  taking  them  altogether,  had  fallen  less  than  10 
per  cent,  since  1878,  while  the  prices  of  clothes  and 
clothing  had  fallen  82  per  cent. ;  fuel  and  light  nearly 
24  per  cent. ;  metals  and  implements,  85  per  cent. ; 
lumber  and  building  materials,  nearly  20  per  cent. ; 
drugs  and  chemicals,  81  per  cent.;  house- furnishing 
goods,  27  per  cent.,  and  miscellaneous  articles,  10  per 
cent.  The  prices  for  the  year  1860  being  taken  as  the 
standard  were  represented  by  100,  and  increases  and 


£02  8ILVEB  AND  GOLD. 

decreases  were  shown  by  deviations  from  that  number 
up  or  down,  as  the  case  might  be.  Tlie  investigation 
•showed  that  at  the  time  it  was  made  articles  of  food 
stood  at  108.9,  or  nearly  4  per  cent,  higher  than  in 
1860 ;  clothes  and  clothing  at  81.1 ;  fuel  and  lighting 
at  91 ;  metals  and  implements  at  74.9 ;  lumber  and 
house-building  materials  at  122.8  ;  drugs  and  chemicals 
at  86.8 ;  house-furnishing  goods,  at  70.1,  and  miscella- 
neous articles  at  95.1.  These  results  of  the  investiga- 
tion establish  three  facts  which  have  an  important  bear- 
ing upon  the  present  controversy.  The  first  fact  estab- 
lislied  is  that  the  prices  of  articles  of  food  which  are 
the  products  of  the  farms,  gardens,  orchards,  and 
dairies  of  the  country,  were  about  4  per  cent,  higher 
than  they  were  in  the  year  1860,  long  before  the  silver 
legislation  now  complained  of ;  the  second  is,  that  the 
fall  in  the  prices  of  these  farm  products  since  the  year 
1878  has  been  much  less  than  the  fall  in  the  prices  of 
the  commodities  the  farmers  have  to  buy ;  and  the 
third  is,  that  the  reductions  in  prices  have  not  been 
uniform,  either  as  to  particular  articles  or  groups  of  ar- 
ticles, and  therefore  cannot  be  attributed  to  one  and 
the  same  cause — to  the  appreciation  of  gold,  for  in- 
stance. The  conclusion  is  inevitable  that  various  influ- 
ences have  operated  to  produce  these  changes  in  prices, 
some  affecting  one  group  of  articles  and  some  another 
and  doubtless  some  affecting  all,  but  to  no  one  influ- 
ence can  the  whole  result  be  attributed.  Cotton  and 
wheat  are  the  commodities  most  frequently  referred  to 
by  those  who  contend  that  the  fall  in  prices  is  due  to 
the  appreciation  of  gold,  but  there  is  nothing  whatever 
in  the  methods  of  producing  those  articles,  or  in  trans- 
porting or  selling  tl)em,  or  in   the  character  of  the 


JOHN  O.   CARLISLB.  608 

tnonej  received  for  theniy  which  would  make  the  appre- 
ciation  of  gold  affect  their  prices  more  than  it  would 
affect  the  prices  of  other  commodities  produced  by  our 
people.  Id  addition  to  the  various  causes  which  have 
more  or  less  affected  the  prices  of  all  articles,  the  prices 
of  these  two  products  have  been  seriously  affected  by 
the  enormous  increase  in  their  production  since  tlie  year 
1872,  which  was  the  last  crop  year  preceding  the  legis- 
lation in  regard  to  silver.  The  production  of  cotton  in 
this  country  in  1872-'3  was  2,974,351  bales,  containing 
an  average  of  439  pounds  net  weight,  while  the  pro- 
duction in  1893-4  was  7,549,817  bales,  containing  an 
average  of  474  pounds  net  weight,  or  an  increase  of 
nearly  200  per  cent,  in  this  country  alone,  besides  the 
great  increase  that  has  taken  place  in  competing  coun- 
tries; and  in  1894-'5  the  production  here  was  much 
larger,  being  nearly  10,000,000  bales.  According  to 
the  statistics  of  the  agricultural  department,  the  pro- 
duction of  wheat  in  this  country  in  1872  was  249,997,- 
100  bushels,  and  in  1894,  460,267,416  bushels,  or  nearly 
twice  as  much,  and  there  has  also  been  an  enormous  in- 
crease of  production  in  competing  countries.  But, 
notwithstanding  the  great  increase  in  the  production 
of  cotton  and  wheat,  here  and  in  other  countries,  and 
the  consequent  decline  in  their  prices,  a  given  quantity 
of  either  of  them  will  now  purchase  in  our  own  mar- 
kets and  in  the  markets  abroad  a  larger  share  of  many 
other  Useful  commodities  than  it  would  have  purchased 
in  1872  or  1873,  so  that,  in  fact,  as  compared  with 
many  other  things,  the  values  of  cotton  and  wheat  have 
appreciated. 

The  one  thing  which  has  been  less  affected  by  the 
changes  in  the  relation  between  supply  and  demand,  by 


{ 


504  SILVEB  AND  GOLD. 

improvements  in  the  methods  of  production  and  distri- 
bution and  by  the  other  influences  which  produce  fluc- 
tuations in  prices  of  commodities  generally,  is  labor, 
and  it  is  by  far  the  most  important  single  source  of  in- 
come possessed  by  our  people,  a  much  larger  amount 
being  expended  every  year  in  the  payment  of  wages 
than  for  any  other  one  purpose.  The  cost  of  labor  in 
the  manufacturing  and  mechanical  industries  alone 
during  the  census  year  1889  was  $2,283,216,529,  which 
was  nearly  two  and  one-half  times  the  value  of  all  the 
wheat  and  cotton  produced  in  this  country ;  and  if  we 
add  to  this  the  amounts  paid  for  farm  labor,  for  clerical 
and  other  work  in  mercantile  establishments,  for  do- 
mestic service  and  for  work  on  railways  of  all  kinds,  on 
water  craft,  on  streets  and  other  improvements  in  the 
cities,  and  in  the  many  other  occupations  which  give 
employment  to  our  people,  we  would  have  a  sum  al- 
most,  if  not  quite,  equal  to  the  value  of  all  our  agricul- 
tural products.  It  is  evident,  therefore,  that  if  the  al- 
leged depreciation  of  gold  alone  has  caused  a  reduction 
of  prices,  the  wages  of  labor,  the  greatest  commodity 
in  the  market,  should  have  fallen  since  1878 ;  but  ex- 
actly the  reverse  is.  true.  The  investigations  of  this 
subject  by  the  sub-committee  covered  a  period  of  fifty- 
two  years  and  embraced  all  the  occupations  in  which 
our  people  were  engaged,  and  the  fact,  unanimously 
found,  was  that,  although  eighteen  years  had  elapsed 
since  the  silver  legislation,  the  wages  of  labor  were 
higher  than  in  1872  or  1873.  Wages  were  found  to  be 
nearly  61  per  cent,  higher  than  in  1860,  which  was 
thirteen  yeai*s  before  the  silver  legislation,  and  moi*6 
than  eight  per  cent,  higher  than  in  1878,  when  that 
legislation  was  adopted. 


CHAUNCEY  M.  DEPEW, 


^OHN  G.  CABLISLB.  507 

The  argument  that  the  reduction  of  prices  is  due  to 
the  appreciation  of  gold  is  necessarily  based  upon  the 
further  assumptions  that  the  legislation  hi  regard  to 
silver  has  produced  a  scarcity  of  redemption  or  metal- 
lic money  in  the  world,  and  that  prices  are  fixed  and 
regulated  by  the  amount  of  such  money  in  circulation, 
or  available  for  circulation.  Neither  of  these  assump- 
tions is  justified  by  the  facts.  The  most  exhaustive 
efforts  have  been  made  from  time  to  time  by  the  treas- 
ury department,  through  the  Director  of  the  Mint,  by 
careful  examinations  of  the  monetary  statistics  of  other 
countries,  by  correspondence  with  our  diplomatic  a^d 
consular  representatives  abroad  and  with  foreign  finan- 
cial authorities,  and  otherwise,  to  ascertain  the  actual 
amount  of  gold  and  silver  used  as  money  in  the  world, 
and  the  result  shows  that  there  is  now  more  gold  and 
silver  in  the  aggregate,  and  more  of  each  one'  of  them, 
in  use  as  full  legal  tender  money  than  there  ever  was 
at  any  other  time  in  the  histoiy  of  the  woi'ld.  The 
gold  in  use  ^s  money  amounts  to  $8,965,900,000,  the 
full  legal  tender  silver  amounts  to  $3,435,800,000,  and 
the  limited  legal  tender  silver  amounts  to  $619,900,000. 
The  policy  of  maintaining,  or  rather  attempting  to 
maintain,  the  so-called  double  standard  never  succeeded 
in  keeping  so  large  an  amount  of  full  legal  tender  sil- 
ver in  circulation  in  the  world  as  there  is  at  this  time, 
and  one  of  the  principal  reasons  for  this  is  that  the 
effect  of  the  policy  was  to  drive  first  the  coins  of  one 
metal  and  then  the  coins  of  the  other  into  the  coffers 
of  the  hoarders  or  into  the  melting-pots,  because  they 
were  undervalued  in  the  coinage  laws  and  would  not 
remain  in  use  ad  money. 

I  attach  very  little  importance  to  the  per  capita 
29 


608  8ILVBR   AND  GOLD. 

argU^  ent,  because  the  amount  of  currency  required  in 
a  coui  f  ry  depends  mainly  upon  the  volume  of  business 
to  be  t/ansacted  and  the  customs  of  the  people  in  con- 
ducting  their  exchanges,  and  not  at  all  upon  the  num* 
ber  of  men,  women,  and  children  residing  in  it,  but, 
as  there  are  a  great  many  who  believe  that  the  circula- 
tion should  be  regulated  by  the  census  returns,  it 
may  be  worth  wliile  to  state  that  the  production  of  gold 
alon^  in  1890 — and  it  is  much  larger  now — was  nearly 
two  and  a  half  time  greater  than  the  average  annual 
production  of  gold  and  silver  both  during  the  decade 
which  closed  with  the  year  1800.  In  1800  the  popula- 
tion of  all  the  countries  in  Europe  and  America  was 
197,505,895,  and  the  production  of  both  gold  and  silver 
amounted  to  $24.49  for  every  hundred  inhabitants, 
while  in  1890  the  population  of  the  same  countries  was 
466,789,841,  and  the  production  of  gold  alone  was 
$118,849,000,  which  amounted  to  J25.46  for  every  hun- 
dred inhabitants,  or  ninety-five  cents  more  for  each 
hundred  people  than  was  furnished  by  both  metals  dar- 
ing each  year  in  the  former  decade.  In  1894  the 
population  of  these  countries  was  485,180,841,  and  the 
production  of  gold  alone  was  *157,228,000,  being  $32.41 
for  each  hundred  inhabitants,  or  $7.92  more  for  each 
hundred  people  than  the  total  of  both  metals  during 
the  last  decade  of  the  last  century.  If,  therefore,  the 
people  of  Europe  and  America  haJ  used  as  money  all 
the  gold  and  all  the  silver  annually  produced  in  the 
world  one  hundred  years  ago,  they  would  not  have  re- 
ceived as  large  a  per  capita  addition  to  their  stock  of 
money  as  they  would  receive  now  by  adding  the  gold 
alone.  In  view  of  these  facts,  I  submit  that  the  silver 
legislation  of  1871, 1878,  and  1876  has  not  diminished 


JOHN  G.   CABLISLB.  £09  . 

the  world^s  supply  of  metallic  money  as  compared  with 
former  times  and  prevented  the  single  gold-standard 
countries  from  making  as  great  an  annual  addition  to 
their  stock  of  metallic  currency. 

Official  monetary  statistics  show  that  in  the  gold- 
standard  countries  of  the  world  the  stocks  of  money 
are  much  larger  per  capita  than  in  the  silver-stand- 
ard countries.  Taking  the  large  gold-standard 
countries  and  the  large  silver-standard  countries,  it  ap- 
pears that  in  1894  the  stock  of  money  in  the  United 
States  was  over  $25  per  capita,  in  the  United  Kingdom 
nearly  $20,  and  in  Germany  nearly  $19,  while  in  Mexico 
the  per  capita  was  $4.71,  in  Russia  and  Finland  $8.32, 
and  in  China  $3  26.  The  gold-standard  countries  use 
large  amounts  of  silver  as  money,  but  the  silver- 
standard  countries  use  no  gold  as  money,  and  cannot  do 
so  for  the  reasons  I  have  already  endeavored  to  ex- 
plain. But  for  the  reasons  already  stated,  the  com- 
mercial nations  of  the  world  do  not  now  require  the 
same  proportion  of  metallic  money  in  the  transaction  of 
their  business  that  they  required  a  few  centuries  ago, 
or  even  one  century  agr.  Credit  has  been  vastly  ex- 
tended and  the  use  of  paper  in  the  form  of  notes, 
checks,  and  bills  has  almost  entirely  displaced  metal- 
lic money  in  the  daily  business  of  the  people,  and  as 
long  as  these  forms  of  credit  are  kept  equal  in  value  to 
the  metallic  standard,  the  effect  upon  the  prices  of  com- 
modities is  precisely  the  same  as  if  the  whole  volume  of 
circulation  consisted  of  standard  coin,  for,  as  long  as  . 
equality  in  their  value  can  be  maintained,  the  paper 
representatives  of  the  dollar  perform  exactly  the  same 
office  in  the  exchange  of  commodities  that  gold  dollars 
themselves  would  perform ;  but  if  this  equality  is  de* 


6l0  BILySB  AND  GOLD. 

Btroyed,  the  paper  is  discredited,  its  purchasing  power 
is  diminished,  and  the  people  have  no  longer  a  stable 
measure  of  value. 

One  of  the  most  effective  arguments  made  by  the 
advocates  of  free  coinage,  in  some  parts  .of  the  country 
at  least,  is  that  the  people  are  in  debt,  and  that  it  is  the 
duty  of  the  government  to  relieve  them  by  such  legisla- 
tion as  will  enable  them  to  procure  cheap  money  for  the 
purpose  of  discharging  their  obligations,  and  in  support 
of  this  argument  the  most  exaggerated  statements  are 
made  as  to  the  depressed  and  suffering  condition  of 
our  farmers,  wage- earners,  and  other  producing  classes. 
This  argument  concedes  that  under  the  proposed  sys- 
tem of  free  coinage  at  the  ratio  of  16  to  1  all  the  vari- 
ous kinds  of  currency  in  use  by  the  people,  including 
the  silver  dollar  itself,  would  be  worth  less  than  it  is 
now,  for,  of  course,  if  this  is  not  to  be  the  result 
money  would  be  no  cheaper  than  it  is  now.  To  assert 
that  the  people  are  in  debt  is  simply  to  say  that  they 
have  traded  with  each  other  on  credit,  that  one  part  of 
our  fellow-citizens,  relying  upon  the  integrity  and 
financial  standing  of  their  neighbors  and  acquaintances, 
have  lent  them  money  on  time  and  sold  property  to 
them  without  demanding  immediate  payment  in  cash, 
and  that  in  this  way  they  have  enabled  many  people  to 
carry  on  a  useful  business  and  live  in  comfortable 
homes  who  otherwise  could  not  have  done  so,  Xf  it  is 
a  crime  to  lend  money  to  a  man  who  wants  t.  borrow 
it,  or  to  sell  property  on  credit  to  a  man  who  wants  to 
purchase  it,  and  has  no  ready  money  to  pay  for  it,  let 
the  perpetrators  be  properly  punished,  but  let  us  not  in- 
volve the  whole  country  in  confusion  and  disaster  and 
immolate  the  innocent  and  guilty  alike  in  order  to  pun- 


JOHK   G.   CAtlLISlifi.  611 

ish  the  real  offenders.  If  our  people  are  in  debt,  they 
owe  each  other,  and,  consequently,  about  as  many 
would  be  actually  injured  as  would  be  apparently  bene- 
fited by  scaling  the  obligations  down  to  a  silver  stand- 
ard. The  indebtedness  of  the  fanners,  mechanics,  and 
other  laboring  classes  of  our  people,  although  large  in 
the  aggregate,  is  quite  small  in  comparison  with  the 
whole  indebtedness  of  the  great  railroad  and  manu- 
facturing corporations,  the  national  and  state  banks, 
savings  institutions,  trust  companies,  insurance  com- 
panies, building  associations,  and  other  organizations 
engaged  in  financial  and  commercial  enterprises.  These 
various  organizations  are  indebted  to  the  people  to  the 
extent  of  many  billions  of  dollars,  and  while  it  is  true 
that  many  of  the  people  are  also  indebted  to  them, 
their  debtors  and  creditors  are  not  the  same  persons, 
and,  therefore,  the  debts  cannot  be  set  off  against  each 
other  and  extinguished  in  that  way.  I  deny  that  there 
is  any  such  thing  as  a  distinct  ^^  debtor  class  "  in  this 
country,  for,  while  nearly  every  one  owes  some  debts, 
large  or  small,  nearly  every  one  has  also  some  debts 
owing  to  him ;  in  other  words,  he  is  both  debtor  and 
creditor  The  laboring  people,  as  a  general  rule,  owe 
very  little  at  any  one  time,  while  their  employers  are 
always  indebted  to  them,  because  wages  are  not  paid  in 
advance ;  and  besides,  many  of  them  have  small  de- 
posits in  savings  and  other  banks,  in  trust  companies, 
in  building  associations,  and  large  numbers  of  them 
have  their  lives  insured  for  the  benefit  of  their  wives 
and  children,  and  consequently  they  ar**  creditors  of 
the  banks  and  the  insurance  companies.  The  savings- 
bank  depositors  in  this  country  last  year  numbered 
4,777,687,  and  the  wives  and  children  of  the  depositors 


012  SlLVBtt  AKt)  G6tD. 

who  depend  upon  these  accumuhited  earnings  for 
future  support  doubtless  numbered  10,000,000  more. 
There  were  1,925,340  depositors  in  the  national  banks 
last  year,  and  1,724,077  of  them  had  deposits  of  less 
than  $1,000  each,  while  state  and  private  banks  and 
loan  and  trust  companies  held  deposits  for  1,436,638 
people.  Our  life  insurance  companies,  to  say  nothing  of 
companies  insuring  property  against  loss  by  fire  and 
otherwise,  had  7,606,870  policies  outstanding  last  year, 
upon  which  the  premiums  had  been  paid,  or  were  being 
paid,  by  the  people,  and  the  mutual  benefit  and  assess- 
ment companies  had  3,478,000  members.  The  building 
and  loan  associations  had  nearly  2,000,000  members,  all 
of  whom  had  paid  their  money  in  as  required  by  the 
rules  of  the  body  to  which  they  belonged.  Here,  then, 
are  about  21,000,000  of  our  people,  generally  poor,  or 
at  least  people  of  moderate  means,  who  have  given 
credit  to  these  great  corporations  and  companies,  and, 
in  ray  opinion,  it  would  be  a  grievous  wrong  to  adopt 
any  policy  which  would  deprive  them  of  the  legal 
right  to  demand  and  receive  just  as  good  money  as 
they  parted  with  when  they  made  the  deposits  in  the 
banks  or  paid  the  premiums  on  their  insurance  policies. 
The  hard-earned  savings  of  the  poor  ought  not  to  be 
sacrificed  to  the  avarice  of  the  wejilthy  mine-owners 
or  the  ambition  of  aspiring  ^politicians,  and  if  the  peo- 
ple who  have  a  substantial  interest  in  the  welfare  of  the 
country  and  a  just  appreciation  of  their  responsibilities 
as  citizens  will  exert  their  proper  influence  in  public 
affairs  this  great  wrong  can  never  be  perpetrated. 

It  is  not  my  purpose  to  discuss  here  the  varions 
propositions  which  have  been  made  from  time  to  time 
for  the  improvement  of  our  banking  system,  or  for  the 


JOHK  G.  GAtKtlSLE.  618 

Retirement  of  United  States  notes,  because  the  questions 
involved  in  them  are  so  important  and  so  large  that 
they  cannot  be  properly  considered  in  connection  with 
the  subject  to  which  I  have  addressed  myself.  We 
have  an  abundance  of  money  in  this  country  for  all  the 
purposes  of  trade,  and  the  disturbances  and  hard  times 
of  1893  and  1894  were  not  caused  by  a  scarcity  or  con- 
traction of  the  currency,  but  by  a  contraction  of  credit 
resulting  from  a  loss  of  confidence  in  the  stability  and 
value  of  our  currency.  So  far  as  the  mere  volume  of 
our  currency  is  concerned,  we  had  then  and  have  now 
an  ample  supply  for  all  necessary  purposes,  but  under 
the  existing  system  it  is  not  properly  distributed  and  is 
not  sufficiently  elastic  to  meet  all  the  changing  require- 
ments of  business  at  different  periods  of  the  year.  The 
Unite<l  States  should  go  entirely  out  of  the  banking 
business  by  the  withdrawal  of  its  arbitrary  and  com- 
pulsory issues  of  notes  and  afford  the  people  an  oppor- 
tunity to  supply  their  own  currency  based  upon  their 
own  means  and  credit,  thus  enabling  every  community 
to  utilize  its  own  resources  when  necessary  and  adjust 
the  circulation  from  time  to  time  to  the  actual  demands 
of  legitimate  commerce.  In  what  way  this  shall  be  ac- 
complished is  a  question  which  has  already  engaged  the 
serious  attention  of  the  people  and  public  authorities, 
and  it  will  no  doubt  continue  to  be  investigated  and 
discussed  until  a  plan  is  formulated  which,  if  not  per- 
fect, will  at  least  have  the  merit  of  being  a  great  im- 
provement upon  the  existing  system.  In  the  meantime 
our  highest  duty  is  to  preserve  the  present  standard  of 
value,  maintain  the  parity  of  the  two  metals,  and  keep 
all  the  money  in  circulation  among  the  people,  whether 
it  be  gold  and  silver  coins,  or  paper  based  upon  them. 


1 


514  SILVEB  AND  GOLD. 

equal  in  purchasing  power,  so  that  no  discrimination 
will  or  can  be  made  between  those  who  receive  silver 
or  paper  and  those  who  receive  gold.  A  great  govern- 
mept  should  do  nothing  to  discredit  its  own  obligations 
or  diminish  the  value  of  the  money  in  the  hands  of  its 
citizens,  nor  should  the  people  of  a  great  country  ever 
consent  to  the  adoption  of  a  policy,  through  experi- 
mental financial  legislation  or  otherwise,  which  would 
vitiate  the  obligations  of  their  contracts,  interrupt  the 
regular  course  of  their  business  and  destroy  the  founda- 
tions upon  which  their  industrial  and  commercial  sys- 
tems have  been  constructed.  The  spirit  of  conservatism 
is  still  strong  among  our  people,  and,  notwithstanding 
the  delusive  promises  and  selfish  appeals  that  are  now 
largely  influencing  their  opinions  in  some  parts  of  the 
country,  the  truth  will  ultimately  prevail  and  I  have  no 
doubt  of  the  result  when  the  time  for  final  action 
oomes. 


BENJAMIN   B.    TILLMAN.  ^Ib 


CHAPTER  XXIX. 

CABLISLB'S  S^BEOH  CEITICISBD — ^BY  GOV.  B.  B.   TILIr 

MAN,  OF  SOUTH  GABOLINA. 

I  SHALL  in  what  follows  offer  some  criticisms,  and 
arguments  in  answer  to  the  speech  made  by  Secretary 
Carlisle  at  Memphis,  Tenn.,  May  23, 1895.  I  do  this 
because  that  speech  has  been  circulated  throughout  the 
country,  and  stands  as  the  accepted  creed  of  the  gold 
monometallists,  and  the  ablest  defence  of  the  policy 
now  pursued  by  our  government. 

The  vital  nature  of  the  issue  is  clearly  stated  by  Mir. 
Carlisle,  when  he  says  : 

*^  I  do  not  think  the  importance  of  the  question  can 
be  overestimated  or  that  the  gravity  of  the  situation 
can  be  overstated.  The  proposition  to  revolutionize 
our  monetary  system  and  thus  destroy  the  credit  of  the 
goverfiment  and  the  people  at  home  and  abroad,  violate 
the  obligations  of  all  contracts,  unsettle  all  exchange- 
able values,  reduce  the  wages  of  labor,  expel 
capital  from  our  country  and  seriously  obstruct  the 
trade  of  our  people  among  themselves,  and  with  the 
peoples  of  other  countries,  is  one  which  challenges  the 
intelligence,  patriotism  and  commercial  honor  of  ever}' 
man  to  whom  it  is  addressed/' 

There  are  millions  of  our  fellow  Citizens  who  no 
doubt  honestly  believe  this  indictment  so  strongly 
drawn  against  the  advocates  of  bimetallism  to  be  true 
in  every  particular.    There  are  other  millions, — a  great 


616  6lLVfeR  AKt>  OOLD. 

iiitijoi  ity  01  tiie  American  people, — I  firmly  believe-^who 
feel  that  instead  of  impeiiding  disasters,  the  bolts  have 
already  fallen:  and  that  our  monetary  system  has  al- 
ready been  '^  revolutionized " ;  that  the  credit  of  the 
government  has  been  so  far  ^'  destroyed  *'  that  $162,- 
000,000  of  bonds  were  deemed  necessary  in  time  of 
peace  to  bolster  it  up  and  others  must  follow.  That  the 
credit  of  the  people  at  home  has  been  so  injured,  the 
obligations  of  contracts  so  violated,  all  values  so  unset- 
tled, so  much  more  of  labor  or  of  the  products  of  labor 
are  necessary  to  buy  a  dollar  with  which  to  pay- 
debts,  that  bankruptcy  stares  all  debtors  in  the  face, 
while  millions  have  already  been  pauperized  by  this 
*' monetary  revolution."  That  this  struggle  to  lift 
mortgages  is  hopeless  under  existing  conditions,  and 
the  savings  of  all  previous  years  of  labor  must  be  lost. 

We  know  there  are  millions  of  workers  out  of  em 
ployment.  We  know  the  farmers  of  our  land  are  sell 
ing  their  crops  for  export  at  less  than  the  cost  of  pro* 
duction.  Can  the  condition  of  the  counti*y  be  made 
more  desperate?  Will  the  restoration  of  silver  to  its 
constitutional  place  as  a  money  of  final  redemption  in- 
crease oui*  ills? 

Is  the  country  about  to  be  ruined,  or  is  it  already 
ruined  ?  Are  we  threatened  with  a  "  spring  of  wars 
unnumbered  "  from  a  returi*  to  the  bimetallic  standard, 
or  will  it  give  us  i^lief  from  a  well-nigh  unbearable 
situation  ? 

Mr.  Carlisle  contends  that  the  country  cannot  and 
ought  not  retrace  its  steps.  Let  us  examine  his 
arguments.  We  will  find  some  remarkable  cases  of 
self-deception  or  contradictions. 

He  says : 


vjap 


BlEKJAMtN   R.   tiLLMAK.  '6lt^    "  ^ 


t    .: 


**From  the  earliest  times  gold  and  silver  bave  been 
used  as  money,  by  common  consent  of  tht  people  for 
centuries  before  there  was  any  law  upon  the  subject  or 
any  coins  in  existence.  The  laws  of  trade  fixed  and 
regulated  the  actual  and  relative  values  of  both  metals 
in  the  purchase  and  sale  of  other  commodities  just  as 
they  do  now.  They  had  been  used  as  money  several 
centuries  before  any  government  undertook  to  establish 
a  ratio  between  them,  and  when  this  character  of  legis- 
lation was  first  begun  the  public  authorities  did  not  at- 
tempt to  establish  new  values  or  new  ratios  but  ac- 
cepted those  already  fixed  by  the  laws  of  trade  and  the 
custom  of  merchants.  Coins  were  made  not  for  the 
purpose  of  attempting  to  add  anything  to  the  intrinsic 
or  exchangeable  value  of  the  metal  contained  in 
them,  but  for  the  purpose  of  attesting  by  public 
authority  its  weight  and  purity.'* 

So  far  it  is  the  statement  of  fact  as  attested  by 
history.  But  listen  to  the  ^^lame  and  impotent  con- 
clusions *'  deduced  from  it : 

'^  That  the  coinage  of  the  metals  does  not  now  add 
anything  to  their  actual  value  in  the  commercial  world 
is  conclusively  proved  by  the  facts  that,  in  all  the  great 
transactions  between  the  people  of  different  countries,  the 
coins  are  acceptable  only  at  their  bullion  value,  deter- 
mined by  their  actual  weight  and  fineness,  and  that  bullion 
itself  is  still  used  in  making  payments,  just  as  it  was 
thousands  of  years  ago.  Whatever  effect  legislation 
upon  the  ratios,  in  connection  with  legal  tender  laws, 
may  have  had  upon  the  •  use  of  the  two  metals  in  the 
payment  of  antecedent  debts,  it  has  never  had  the 
slightest  effect  upon  the  actual  or  relative  values  of  the 
two  metals  in  national  or  international  trade.  *  *  *  ^ 


51>  8ILVBB  AND  GOLD. 

The  legal  tender  laws  affect  the  debt-paying  power  of 
the  coin  itself  in  the  country  where  tlie  laws  prevail, 
but  the  laws  establishing  ratio  do  not  affect  the  value 
of  the  metal  contained  in  the  coins  either  at  home  or 
abroad,  because  it  is  the  metal  that  fixes  the  value  of 
the  coin  and  not  the  coin  that  fixes  the  value  of  the 
metal." 

This  statement  is  utterly  at  variance  with  the  facts. 

Only  one  of  the  metals — gold — is  being  coined  now 
in  any  of  the  great  commercial  countries,  and  when 
we  remember  that  for  hundreds  of  years  the  coinage 
of  the  two  metals  at  the  mints  of  Europe  and  Amer- 
ica kept  the  ratio  approximately  at  15}  to  1  it  is 
astounding  to  be  told  that  the  ^'  coinage  of  the  metals 
does  not  add  anything  to  their  actual  value  in  the  com- 
mercial world.'*  Can  any  sane  or  honest  man  believe 
that  the  free  coinage  of  gold  and  the  interdict  against 
silver  being  coined  have  had  no  effect  on  the  relative 
value  of  the  two  metals  ?  Is  the  experience  of  man- 
kind for  ages  and  the  teachings  of  history  to  go  for 
naught  against  the  dictum  of  a  financial  doctrinaire 
who  has  argued  with  equal  ability  on  both  sides  of 
this  question,  even  in  the  speech  we  are  considering? 
If  the  coinage  of  one  metal  and  the  failure  to  coin  the 
other  do  not  affect  value,  why  do  the  advocates  of  the 
gold  standard  object  so  strenuously  to  restoring  to  sil- 
ver its  right  of  coinage  ^ill  any  one  assert  that  if 
gold  and  silver  could  swap  places,  making  silver  the 
standard  of  value  with  free  mintage,  and  gold  the  com- 
modity, that  present  ratio  of  the  metals  would  not 
be  reversed  and  a  silver  dollar  be  worth  one-eighth 
of  a  gold  dollar  instead  of  one-thirty-second  part  ?  In 
twenty-two  years  the  coinage  laws  and  nothing  else 


BBKJAMIN    B.   TILLMAN.  619 

have  raised  the  value  of  the  gold  dollar  to  double  its 
normal  value  «iOth  as  compared  with  silver  and  with 
all  other  kinds  of  property. 

The  ratio  between  the  metals  will  settle  itself  when 
the  mints  of  the  world  are  opened  to  the  two  on  equal 
terms,  and  as  experience  and  custom  among  men  had 
made  the  ratio  about  15^  to  1  for  thousands  of  years. 
We  can  justly  claim  that  the  interference  of  govern- 
ments by  their  coinage  laws  for  the  advantage  of  gold 
and  to  the  discredit  of  silver  has  had  everything  to  do 
with  the  relative  valua  of  the  two  at  this  time,  and 
Mr.  Carlisle's  assertion  to  the  contrary  is  proved  to  be 
untrue.  In  this  ''connection  I  assert  as  an  historical 
fact  that  the  ratict  between  the  metals  as  bullion  in  the 
marts  of  trade  ^ever  deviated  from  the  ratio  fixed  by 
law  for  coinagr/  more  than  1  per  cent,  until  the  mints 
were  closed  to  ^silver. 

Mr.  Carlisle  next  discusses  the  question  of  standards 
and  satisfies  Mmself  and  his  followers,  no  doubt,  ohat 
actual  bimeUllism  is  an  impossible  attainment  except 
by  and  througli  the  single  gold  standard  now  existing. 
In  a  word  one  metal  must  be  redeemable  in  the  other 
and  be  denied  further  coinage  to  obtain  bimetallism. 
Bimetallism,  honest,  real  bimetallism,  means  the  un- 
limited coinage  of  both  metals  on  the  same  terms  into 
primary  money  at  some  fixed  ratio,  no  matter  what ; 
though  the  experience  of  ages  had  settled  on  15|  to  1 
as  about  the  right  proportion.  Whether  the  two  circu- 
late at  the  same  time  in  a  given  country  or  first  one 
and  then  the  other  shall  be  its  metallic  currency,  makes 
no  difference.  Honest  bimetallism  means  the  use  by 
the  nations  of  the  earth  of  $7,500,000,000  gold  and 
silver,  the  world's  entire  stock,  as  primary  money  with 


520  8ILYEB  AND  GOLD. 

which  business  may  be  transacted  and  debts  paid. 
Dishonest  bimetallism  means  the  use  of  just  half  that 
much  of  gold  money  and  the  shrinkage  of  values  to 
correspond  to  the  change  of  standard,  and  the  reduc- 
tion in  the  volume  of  legal  tender. 

The  struggle  among  the  nations  of  the  world  to  ob- 
tain gold  is  what  has  doubled  its  price  or  value.  The 
demand  has  been  great  because  it  is  the  only  standard 
of  value,  and  has  the  right  of  way  to  the  mints— 1« 
actual  money  by  law — and  the  supply  being  limited  and 
inadequate,  it.  has  continued  to  rise,  requiring  an  in- 
creased amount  of  silver  and  all  other -commodities  to 
buy  a  given  quantity  of  it.  Bimetallism — the  double 
standard —coinage  into  primary  money  on  terms  of 
equality  of  both  metals  can  alone  restore  to  the  world 
its  lost  prosperity.  The  double  standard — ^the  circula- 
tion on  terms  of  equality  of  both  metals,  as  Mr.  Car- 
lisle contends,  may  be  impossible  of  attainment  in  any 
one  country  for  long  without  international  agreement, 
but  the  business  relations  existing  between  the  nations 
of  the  earth  are  so  close  and  sensitive,  that  the  price 
or  value  of  both  depends  on  the  mintage  of  both. 
Bimetallism  does  not  mean  the  simultaneous  circula- 
tion  of  both  in  a  given  country,  but  the  right  to  coin- 
age of  both.  Whether  gold  or  silver  shall  then  circu- 
late in  a  country  will  depend,  as  Mr.  Carlisle  himself 
says,  on  its  coinage  laws.  I  quote  from  the  Memphis 
speech : 

"With  free  coinage  or  coinage  upon  equal  terms, 
and  both  are  made  legal  tender,  the  coins  of  the  under- 
valued metal  will  be  drawn  out  of  circulation  and  out 
of  use  as  raonev  in  the  country  where  the  unequal  val- 
uation is  made. 


BENJAMIN  B.    TILLMAN.  521 

In  ether  words  the  ratio  between  the  metals  in  coin* 
age  determines  which  metal  shaU  circulate.  But  both 
will  not  circulate  if  either  is  undervalued  unless  one 
is  denied  coinage.  Our  silver  dollars — derisively  called 
"fifty-cent  dollars"  now  circulate  side  by  side  with 
the  hundred  cents  gold  dollar — "practical  bimetallism" 
Mr.  Carlisle  calls  it.  But  one  is  the  slave  of  the  other. 
They  are  both  "fiat  money  "  and  it  is  the  stamp  of  the 
government  which  gives  them  a  money  value.  The 
greenback  paper  dollar — also  "fiat" — circulates  too. 
It  is  worth  one  hundred  cents  because  it  is  redeemable 
in  "  coin,"  gold  or  silver.  Melt  the  gold  and  silver 
dollars  into  bullion — the  gold  is  still  worth  one  hun- 
dred cents  but  the  silver  is  only  worth  fifty.  The  gold 
n^^y  go  to  the  mint  and  be  recoined ;  the  silver  be- 
comes a  commodity,  and  may  not  be  coined  now  in  the 
United  States,  yet  Mr.  Carlisle  tells  us  we  have  "  prac- 
tical bimetallism,"  and  also  the  only  bimetallism  that 
is  possible ! 

The  difference  between  the  two,  the  false  and  the 
true  bimetallism,  as  well  as  the  sophistry  which  seeks 
to  prove  that  gold  has  not  appreciated  in  value,  which 
is  the  reason  for  the  fall  in  prices  and  hard  times,  can 
need  no  clearer  exposition.  To  illustrate  more  fully 
however :  The  paper  dollar  is  money  because  it  is  a 
promise  to  pay  a  dollar  on  presentation  "in  coin." 
The  silver  dollar  is  a  dollar,  a  coined  dollar,  as  is  the 
gold  dollar,  ai>d  neither  represents  anything  but  itself. 
They  are  primary  money.  But  the  silver  dollar  is  no 
longer  worth  one  hundred  cents  as  bullion  because  sil- 
ver has  been  demonetized  in  this  country  and  Europe. 
Demonetized  how?  "B^^  the  laws  of  trade  and  the 
custom  of  merchants?"      2fo,  by  law  or  royal  edict. 


522  SILVER  AND  GOLD. 

The  greenback  dollar  is  a  dollar — legal  tender  for  debt- 
whether  it  is  worth  one  hundred  cents  in  coin  of  not 
by  decision  of  our  supreme  court.  The  silver  dollar 
is  not  a  promise  to  pay,  but  holds  its  value  because  of 
its  stamp.  The  gold  dollar  is  a  dollar  at  all  times  and 
in  all  shapes  because  of  its  right  to  coinage  under  tlie 
law,  and  yet  Mr.  Carlisle  says  that  "Legislation  has 
never  had  the  slightest  effect  upon  the  actual  or  rela- 
tive values  of  the  two  metals  in  national  and  interna- 
tional  trade.''  How  could  an  honest  man  make  such  a 
statement  ? 

We  are  next  told  that  should  the  United  States  re- 
store the  free  coinage  of  silver  without  similar  action 
by  other  countries,  all  our  dollars  in  circulation  would 
become  fifty-cent  dollars  because  that  is  the  commercial 
value  now  of  the  silver  in  a  dollar.  Our  old  greenback 
friend — the  stay  and  prop  of  the  Union  during  the  civil 
war — must  of  course  fall  to  the  level  predicted  for  his 
white  brother.  "  The  laws  of  trade  and  the  customs  of 
merchants  " — in  spite  of  legislation^  which  I  have  shown 
has  such*  a  marked  effect  on  the  ratio  or  relative  value 
of  the  two  metals  will  drive  the  price  of  the  silver 
dollar  and  the  greenback  both  lower  than  greenbacks 
ever  fell  except  for  a  brief  period  during  the  darkest 
hours  of  the  war,  when  Confederate  successes  made  the 
preservation  of  the  Union  doubtful, — though  the  popu- 
lation of  the  dis-United  States  was  then  only  82,000,- 
000  in  sound  members  and  9,000,000  of  these  were  in 
the  seceded  states  and  the  amount  of  greenbacks  in  cir- 
culation was  $1,640,000,000.  The  yellow  dollar  will 
again  disappear  from  among  us  as  he  did  in  1861.  We 
are  now  a  united  people  of  70,000,000;  we  are  at  peace. 
Yet  we  are  gravely  told  by  the  Secretary  of  the  Treasury, 


JOHN  G.    CAKLISLE, 


BENJAMIN    B.  TILT.MAN.  526 

the  leading  fiscal  o£Scer  of  the  richest  aud  greatest 
nation  on  the  earth,  that  we  are  at  the  mercy  of  the 
^Maws  of  the  trade  and  the  customs  of  merchants"  in 
other  countries ;  that  our  people  are  bound  by  the  Shy- 
locks  of  Europe  and  must  submit,  that  we  dare  not  act 
independently  and  emancipate  ourselves  from  the  grind- 
ing thraldom  I 

Shade  of  Washington!  who  led  3,000,000  into  the 
light  of  liberty  and  independence  I  Shade  of  Jefferson  I 
author  of  the  immortal  declaration  of  the  4th  of  July, 
and  first  of  Democrats  I  Shade  of  Jackson !  hero  of 
New  Orleans  and  destroyer  of  the  plutocracy  which 
sought  to  enslave  the  peo]>^d  of  the  republic  in  its 
infancy  I  Shade  of  Lincoln  I  typical  American,  who 
sprung  from  common  people,  loved  them  with  the 
/earning  love  of  a  mother  and  warned  them  of  this 
very  danger ! — ^have  we  sunk  so  low  ?  Must  this  great 
country  await  the  nod  and  beck  of  the  aristocracies  of 
Europe  ?  Must  our  idle  millions  continue  to  beg  for 
work  and  go  hungry  or  join  the  army  of  tramps  and 
beg  for  bread.  Must  tens  of  millions  of  farmers  con- 
tinue to 

**  Lower  bnek«tB  into  empty  well* 
And  grow  old  in  drawing  nothing  np,'' 

receiving  no  reward  for  their  labor  because  the  *'  idle 
owners  of  idle  capital,"  here  and  in  Europe,  have  de- 
creed the  destruction  of  one  of  the  money  metals  of  the 
world  and  their  own  government  is  too  cowardly  to 
strike  off  the  shackles  of  foreign  dic^iition  and  restore 
the  money  of  the  constitution  ? 

Can  any  sane  man  be  made  to  believe  that  it  is  possi- 
ble for   Mr.  Carlisle's  prediction  to   come  to   pass? 
80 


626  SILVER  AND  GOLD. 

That  with  oar  increased  population  and  wealth  we  are 
BO  dependent  on  other  peoples  that  we  cannot,  dare 
not,  act  independently  in  a  matter  of  such  yital  mo- 
ment? Are  we  indeed  so  insignificant  a  factor  in  the 
world's  affairs  that  we  must  pay  tribute  to  British 
greed  and  await  the  permission  of  Bothschild  and  his 
guild  of  bankers  tb  remonetize  silver?  Where  were 
Rothschild  and  his  bankers  during  the  civil  war?  Did 
they  come  to  the  assistance  of  our  government  then  ? 
Of  what  use  was  the  Declaration  of  Independence  any 
way? 

One's  indignation  grows  weary  at  the  cowardly 
truckling  to  British  masters,  but  we  are  dealing  with 
argument  and  not  invective  and  must  return  to  this  as- 
tounding proposition  from  Mr.  Carlisle's  speech : 

^' All  who  are  indebted  to  us  are  ,therefore,  to  have  the 
privilege  of  paying  in  silver,  while  all  to  whom  we  shall 
become  indebted  are  to  have  the  privilege  of  requiring 
us  to  pay  in  gold." 

Suppose  silver  restored  to  coinage  and  as  a  result 
gold  disappears  or  goes  to  a  premium  of  two  to  one, 
will  the  above  statement  or  prediction  come  true  ?  Bear 
in  mind  that  nobody  owes  us  but  that  we  are  the 
debtors  and  that  nearly  all  our  exports  are  agricultural 
products.     In  another  place  Mr.  Carlisle  says : 

^'  It  is  an  axiom  in  trade  that  the  prices  of  exportablv 
products  are  fixed  in  the  foreign  market  where  the  l$u^ 
plus  is  sold  aud  are  fixed  in  the  currency  of  that  oouH' 
try  according  to  its  nominal  value  there." 

Well,  it  will  follow  as  a  matter  of  oou»s6  that  al 
home  or  in  the  country  where  produced,  these  articlw 


BBNJAMIN   R.    TILLMAN.  627 

to  be  priced  in  the  home  currency.  Then  if  it 
should  happen  as  we  are  told  that  the  remonetization 
of  silver  by  this  great  and  rich  country  should  have  no 
effect  on  its  value  in  the  markets  of  the  vs^orld  and  all 
our  dollars  really  become  fifty-cent  dollars  away  from 
home,  then  this  would  be  the  result. 

The  price  of  every  thing  we  export  would  double  in 
the  home  market  while  remaining  as  at  present  in  the 
European  or  gold  markets,  while  what  we  import  would 
cost  the  same  it  now  does  in  the  foreign  markets  and 
would  sell  for  double  at  home.  Our  silver  dollars 
would  weigh  as  bullion  and  be  fifty-cent  dollars  abroad 
and  at  home.  But  we  export  more  than  we  buy  and 
hence  would  send  no  money  to  pay  but  would  exchange 
products  just  as  we  do  now.  Wheat  would  be  worth 
one  dollar  a  bushel  in  the  United  States  and  sell  for 
fifty  cents  in  gold  in  Europe.  Cotton  ten  cents  in 
New  York  and  five  cents  in  Liverpool  and  so  on, 
through  the  list  of  exports. 

Would  that  hurt  the  American  farmer?  "But  the 
exclianges,  the  fluctuations  I "  exclaims  Mr.  Carlisle. 
"  The  producer  must  pay  both  these  risks,"  and  he  at- 
tempts to  show  that  the  farmer  would  not  get  as  good 
prices  for  his  product  as  he  does  now  when  the  gold 
standard  makes  no  difference  among  gold-standard 
countries  and  exchange  rises  and  falls  only  between 
silver-standard  countries  as  silver  goes  up  or  down. 
The  reply  is  the  farmer  can  stand  it  and  will  thank  God 
for  the  chance.  But  silver  will  be  constantly  rising  in- 
stead of  falling  as  it  has  been  for  twenty  years  and 
would  soon  reach  the  old  ratio.  The  argument  can 
have  no  weight  with  any  farmer  who  owes  a  debt  and 
compares  his  ability  to  lift  the  mortgage  with  wheat  at 


528  BILVEB  Ain>  OOLD. 

50  cents  and  wheat  at  fl  a  bushel.  Mr.  Carlisle 
grieves,  or  seems  to  grieve,  because  the  Englishman 
eould  then  send  over  to  us  his  50  cents'  worth  of  silver 
equal  to  a  dollar  to  pay  a  dollar  debt  with.  While  the 
farmer  grieves  because  he  now  has  to  a  send  a  dollar's 
worth  of  wheat  and  gets  back  only  50  cents  in  gold  to 
pay  his  debt.  Let  those  who  owe  us  pay  the  silver 
dollar  tlien,  and  let  us  pay  our  foreign  creditors  in  gold 
— 60  cents'  worth  of  it — or  give  two  dollars  ''or  one. 
That  is  what  we  now  do  in  effect  on  all  we  buy  from 
them.  Our  debts  in  Europe  are  not  a  hundredth  part 
of  the  debts  we  owe  at  home,  and  cannot  pay  at  the 
present  prices  of  our  products.  International  exchanges 
are  as  nothing  compared  with  our  local  and  interstate 
commerce. 

But  let  us  see.  We  owe  Europe  a  large  amount  and 
have  to  send  the  interest  over  annually.  The  balance 
of  trade  in  our  favor  pays  most  of  this  but  the  rest  is 
paid  in  money.  Some  of  the  bonds  are  gold  bonds, 
but  most  of  them  are  **  coin  "  bonds,  and  hence  a  dollar 
in  silver  or  gold  is  legal  tender  for  either  principal  or 
interest.  This  interest  is  now  paid  in  gold  only  and  is 
in  effect  a  double  interest,  and  it  is  hard  to  understand 
why  the  government  of  a  debtor  nation,  and  that  nation 
the  greatest  producer  of  silver,  should  pursue  a  policy 
which  lowers  the  price  of  silver  and  impoverishes  its 
agricultural  classes.  If  that  interest  is  paid  in  silver 
instead  of  gold,  the  silver  dollars  under  the  "  parity  " 
policy  of  our  government  are  exchangeable  for  gold 
and  are  worth  only  50  cents  otherwise,  and  the  practi- 
cal effect  is  to  require  92  worth  of  products  to  pay  $1 
of  interest.  This  will  be  clearly  understood  if  we  sup- 
pose silver  remonetized  ao*'^  ooined  at  the  ratio  of  16 


0?  riAr. 


\ 


tiriTX 


■»• 


*v^ 


BENJAMIN   K.    TILLMAN, 


BfiKJAMlK    R.   TILLMAN.  681 

to  1.  According  to  Mr.  Carlisle  the  silver  dollar  would 
then  be  worth  only  60  cents,  yet  it  would  still  pay  the 
same  interest  it  pays  now.  It  is  clear  then  that  under 
the  gold  standard  policy  now  pursued  we  are  paying 
double  interest  on  all  our  bonds  held  in  Europe,  and 
that  is  why  England  will  never  consent  to  remonetize 
silver  by  international  agreement. 

But  Mr.  Carlisle  calls  this  proposition  "  Repudia- 
tion," "  National  dishonor ! "  It  is  neither.  The  bonds 
are  ''coin"  bonds  just  as  all  United  States  bonds  and 
greenbacks  are  payable  in  coin.  Silver  and  gold  are 
both  coin  when  stamped  as  dollars.  Where,  then,  is 
the  dishonesty  in  paying  what  we  promised?  "It  is 
so  nominated  in  the  bond,"  and  no  fair  or  honest  man 
can  complain.  When  Shylock  was  offered  his  money 
he  demanded  the  pound  of  flesh  also.  He  lost  both  in 
consequence.  The  Shylocks  of  our  day  have  learned 
to  bribe  the  rulers  and  judges  so  that  they  get  both 
money  and  flesh.  The  demonetization  of  silver  gives 
it  to  them.  And  the  "  Daniel  come  to  judgment,"  at 
Memphis,  is  now  hailed  by  the  tribe  of  Rothschild 
with, 

"  O,  noble  judge  I  O,  wise  and  upright  judge  I " 
The  demonetization  of  silver  was  once  denounced  as 
the  "  Crime  of  1878."  Its  remonetization  now  on  the 
same  authority  would  be  an  "experiment"  wrought 
with  disaster.  The  talk  about  "parity,"  "sound 
money,"  and  commercial  honor  are  mere  catch  words 
to  deceive  the  people  and  keep  them  bound  hand  and 
foot  while  the  toiling  millions  of  producers  are  robbed 
annually  of  hundreds  of  millions. 

The  entrance  to  Dante's  Hell  had  over  it : 
"  Who  enters  here  leaves  hope  behind*'* 


682  StLVEK  AND  GOLD. 

The  peopie  of  the  United  States  were  led  by  traitors 
into  that  dark  portal  in  1873.  They  have  tried  in  vain 
ever  since  to  fetrace  their  steps  and  get  out.  Mr.  Car- 
lisle  tells  us  it  would  be  a  most  disastrous  experiment 
to  return  to  the  upper  world  where  the  sun  of  hope  and 
prosperity  is  shining.  He  last  year  proposed  to  lock 
the  door  behind  us  by  the  issue  of  gold  bonds  and  it 
is  still  his  purpose  to  aid  the  president  in  forcing 
the  country  onward  and  downward  in  the  path  of 
ruin. 

^^  International  agreement "  was  not  deemed  neces- 
sary by  those  whc  sneaked  the  demonetization  act 
through  congress  in  1873.  The  United  States  led  off 
in  that  ^*  crime  against  humanity."  This  country  dealt 
the  first  blow  and  forged  the  first  link  in  the  chain 
which  binds  her  a  captive  to  Mammon.  It  is  cowardly 
to  do  wrong  alone  and  thep  cry  out  for  help  to  do 
right.  Our  own  people  are  the  greatest  sufferers.  They 
will  be  most  benefited  by  the  restoi'ation  of  silver.  En- 
gland did  not  affect  the  price  of  sUver  or  destroy  the 
ratio  .  f  centuries  till  the  United  States  led  off  in  sup- 
port of  the  British  scheme  of  demonetization  adopted 
in  1816.  France  is  the  friend  of  the  wh?te  metal  and 
would  act  immediatel}'^  if  we  set  the  example.  It  is 
idle  to  ask  or  expect  English  co-operation.  Mr.  Glad- 
stone said  in  a  speech  in  parliament  two  or  three  years 
back  (I  quote  the  substance  not  the  exact  words)  :  "  It 
would  be  an  inestimable  blessing  to  the  people  of  the 
world  if  silver  were  restored  as  money,  but  England 
capnot  afford  the  specific.  It  means  an  annual  gift  to 
the  other  nations  of  the  world  of  $600,000,000 1 " 

Does  anybody  expect  England  to  surrender  so  large 
a  sum  of  her  own  free  will  ?   It  is  useless,  then,  to  talk 


of  international  agreement ;  and  to  wait  for  it  means 
to  wait  forever.  We  may  turn  our  faces  to  the  wall 
and  bid  adieu  to  any  hope  of  prosperity.  We  have  ig- 
nored the  teachings  of  history  and  the  experience  of 
mankind  and  entered  on  a  dismal  experiment.  So  far 
from  bimetallism — a  restoration  of  silver  to  coinage — 
being  an  experiment ;  it  was  the  fixed  policy  and  cus- 
tom among  nations  during  all  past  ages.  It  required 
all  of  both  metals  to  supply  the  world  with  primary 
money,  and  the  policy  of  redeeming  one  or  the  other 
has  existed  for  twenty-two  years  only. 

To  sum  up :  It  has  been  shown,  1,  That  legislation, 
the  laws  governing  coinage  and  refusing  to  silver  the 
right  of  mintage  is  alone  responsible  for  the  change 
in  the  ratio  between  the  metals  and  the  fall  of  silver ; 
2,  that  the  destruction  of  silver  as  a  standard  or  pri- 
mary money  has  produced  the  shrinkage  in  values  and 
the  fall  in  prices.  Under  the  well-established  rule  that 
supply  and  demand  control  prices — money  yields  obedi- 
ence to  this  law  as  well  as  products,  and  the  world's 
stock  of  money  being  reduced  one-half  by  the  demone- 
tization of  silver,  and  silver  itself  becoming  a  commod- 
ity, values  adapted  themselves  to  the  reduced  supply. 
Mr.  Carlisle's  major  premises  being  false,  all  his  argu- 
ment falls  to  the  ground. 

I  will  close  by  recalling  what  he  said  about  the  rule 
which  obtained  when  legislation  first  began  on  the  sub- 
ject of  coinage : 

"  The  public  authorities  did  not  attempt  to  establish 
values  or  new  ratios  but  accepted  those  already  fixed 
by  the  laws  of  trade  and  the  customs  of  merchants. 
Coins  were  made  not  for  the  purpose  of  attempting  to 
add  anything  to  the  intrinsic  or  exchangeable  value  of 


584  SILVER  AND  GOLD. 

the  metal  contained  In  them,  hut  for  the  purpose  of  at- 
testing  by  public  authority  its  weight  and  piinty. 

All  that  is  necessary  is  to  return  to  this  custom  of 
the  ages.  Give  the  two  metals  the  right  to  be  coined 
into  money— the  ratio  will  adjust  itself— and  values  rise 
to  their  normal  level.  It  is  a  matter  of  law,  for  coinage 
depends  on  law  alone. 


J.  B.  CHEADUC  686 


CHAPTER  XXX. 

BILySB    IN    THE    CONSTITUTION — BY    J.    B.    CHEADLB, 
EX-CONOBESSMAN   FBOM  INDIANA. 

I  DESIBE  to  present  some  phases  of  the  legal  ques- 
tions involved  in  the  discussion  of  the  currency  and 
ask  the  gold  men  whether  they  propose  to  obey  the  law 
and  yield  a  cheerful  obedience  to  the  plain  and  manda- 
tory provisions  of  the  Constitution.  Ours  is  a  Consti- 
tutional government,  that  Constitution  being  the  su- 
preme law  of  the  land.  It  must  be  enforced  in  every 
state  and  obeyed  by  all  the  people.  To  enforce  it  the 
government  was  established  and  is  maintained.  The 
Constitution  is  supreme  not  in  one  but  in  all  things ;  it 
must,  therefore,  be  obeyed  in  all  things. 

Only  recently  an  act  of  congress  that  levied  a  tax 
upon  the  incomes  of  the  rich  was  declared  null  and 
void  by  the  Supreme  court  of  the  United  States,  for  the 
reason  that  it  was  enacted  in  violation  of  the  constitu- 
tion, notwithstanding  the  direct  grant  of  authority  to 
congress  **  to  lay  and  collect  taxes,  duties,  imposts  and 
excises."  ,  This  decision  prohibits  the  laying  and  collec- 
tion of  taxes — unless  they  are  laid  in  compliance  with 
the  provisions  of  the  Constitution.  There  is  no  appeal 
from  that  decision.  The  fact  that  there  will  be  a  def- 
icit of  not  less  than  $45,000,000  in  the  revenues  for 
the  fiscal  year  ending  June  30  counts  for  naught.  The 
Constitution  must  be  obeyed.  That  is  the  supreme  fact 
pf  the  hour. 


•^6  StLVEU  AND  GOLD. 

Do  not  the  backers  know  that  they  are  defying  the 
constitution  when  they  declare  against  silver  and  de- 
nand  that  gold,  and  gold  only,  be  made  the  legal  staud- 
ird  of  values  in  our  money  system  ?  Congress  can  pass 
laws,  but  if  tiiey  are  to  be  legal  they  must  be  enacted 
by  congress  pui*suant  to  the  grant  of  authority  in  the 
Constitution.  There  is  no  escape  from  this  conclusion. 
I  lay  down  this  proposition  that  on  no  other  question 
must  the  Constitution  be  more  literally  obeyed  than  in 
the  grant  of  authority  ^Ho  coin  money  and  regulate  the 
value  thereof."  The  necessity  of  absolute  honesty  in 
creating  a  money  system  and  establishing  the  unit  of 
value  in  that  system  renders  this  duty  imperative. 

What  is  the  command  to  congress  in  the  Constitu- 
tion :  ^^  To  coin  money,  regulate  the  value  thereof,  and 
of  foreign  coin,  and  fix  the  standard  of  weights  and 
measures."  This  grant  is  in  section  8,  article  1,  of  the 
Constitution,  and  is  rendered  still  more  explicit  in  sec- 
tion 10  of  the  same  article,  where,  in  enumerating  the 
restrictions  upon  the  states,  they  are  prohibited  from 
making  "  anything  but  gold  and  silver  coin  a  tender  in 
payment  of  debts."  Thus  it  will  be  observed  that  con- 
gress is  commanded  to  coin  money  and  regulate  the 
value  thereof,  and  all  other  authorities  are  prohibited 
from  making  "anything  but  gold  and  silver  coin  a  ten- 
der in  payment  of  debts."  Gold  coin  and  silver  coin 
Are  thus  made  the  constitutional  and  legal  tender 
money  in  payment  of  debts.  Having  been  made  legal 
tender,  how  can  either  one  of  the  metals  be  dethroned 
as  legal  tender  money  ?  Certainly  not  by  act  of  con- 
gress, for  the  command  to  it  is  t^  coin  money,  that  is, 
create  money — not  destroy  it. 

Daniel  Webster,  the  greatest  constitutional  lawyer 


J.  B.  cnBADtx.  687 

this  nation  has  produced,  said  :  ^^I  am  clearly  of  the 
opinion  that  neither  congress  nor  any  other  authority 
can  legally  demonetize  either  silver  or  gold."  If  one 
coin  can  be  dethroned  as  money  then  the  other  one  can 
be,  and  thus  the  Constitution  could  be  disregarded,  yes, 
overthrown.  Mr.  Webster  made  one  other  statement 
at  the  same  time  thaVI  commend  to  the  most  thought- 
ful consideration  of  gold-standard  men.  These  are  his 
words :  "  The  command  to  congress  is  to  coin  money, 
not  destroy  it ;  to  create  legal  tender  money  for  the  use 
of  the  people,  and  the  grant  of  authority  to  create 
money  cannot  be  construed  to  mean  authority  to  de- 
stroy money." 

The  Constitution  having  made  silver  coin  a  legal 
tender  in  payment  of  debts  it  must  retain  thio  quality 
until  it  is  taken  away  by  a  constitutional  amendment. 
Therefore,  when  men  demand  the  gold  standard  they 
deliberately  request  that  the  supreme  law  of  the  land 
be  disregarded  ;  they  are  traitors  to  the  spirit  of  oui 
institutions.  Certainly  the  wealth  of  the  nation  will 
not  invoke  the  aid  of  the  supreme  law  of  the  land  to 
evade  the  payment  of  a  tax  because  it  was  in  violation 
of  that  supreme  law,  and  then,  in  the  next  breath,  ad- 
vocate the  open  and  willful  violation  of  one  of  its  most 
important  provisions,  the  effect  of  which  would  be  te 
destroy  one  half  of  the  legal  tender  coin  money  of  the 
pountry. 

The  plain  mandate  is  to  coin  legal  tender  money  out 
of  silver  and  out  of  gold,  and  when  coined  regulate  the 
v'alue  of  each  coin. 

I  want  to  emphasize,  if  possible,  the  fact  that  every 
consideration  demands  that  the  Constitution  be  enforced 
In  all  of  its  provisions  in  every  section  of  our  country« 


688  siLVEtt  akd  (^otD. 

National  uonor  demands  it,  and  national  honor  nevet 
considers  the  question  of  cost.  The  permanency  of  our 
liberties  demands  its  enforcement,  and  these  are  above 
all  cost.  The  blood  of  all  the  heroes  who  died  in  the 
establishment  and  preservation  of  the  Constitution  cries 
aloud  for  its  enforcement,  and  a  loyal  people  dare  not 
disregard  this  appeal. 

Thus  it  will  be  seen  that  in  this  contention  the  silver 
men  have  the  Constitution  on  their  side.  They  demand 
that  it  be  enforced,  and  in  this  demand  they  will  be- 
come stronger  in  the  confidence  of  the  public  the  longer 
this  question  is  debated. 

Upon  the  question  of  honest  money  T  want  to  say 
this:  The  act  of  congress  of  1792  created  the  only 
honest  dollar,  the  only  legal  coin  dollar  known  to  our 
money  system.  It  was  the  silver  dollar,  and  the  same 
section  of  the  same  act  measured  all  other  coin  money 
in  and  by  this  dollar.  To  illustrate :  The  act  fixed 
the  value  of  the  $10  gold  piece  as  follows :  *^  Of  the 
value  of  ten  dollars  or  units,"  the  same  of  the  $5  and 
$2  and  60-cent  gold  coins.  So  that  the  two  metals  were 
tied  together  at  the  legal  ratio.  The  quantity  of  gold 
in  the  gold  coin  has  been  changed,  but  the  quantity  of 
silver  remains  the  same  now,  after  the  lapse  of  more 
than  100  years.  This  other  fact  remains :  During  tlie 
first  half  of  the  present  century  the  world's  output  of 
silver  exceeded  that  of  gold  $614,028,000,  and  yet  free- 
dom at  the  mints  held  it  at  par  with  gold  at  its  legal 
ratio,  notwithstanding  the  increased  silver  output,  and 
it  held  it  at  par  until  1878,  when  the  tables  were  turned 
and  the  world's  output  of  gold  exceeded  that  of  silver. 
In  1878  the  mints  were  closed  to  silver,  when  it  was 
worth  91.08  in  gold.    No^  mark  the  result  in  1896| 


JOSEPH  C.    BIBLEY, 


J.   B.  CHEADLB.  641 

when  the  oucput  of  gold  from  1852  to  189^,  forty-one 
years,  exceeds  that  of  silver  in  the  enormous  sum  of 
$1,142,975,000.  Silver  that  was  above  par  in  gold 
when  free  at  the  mints  loses  value  when  measured  in 
gold  until  it  is  only  worth  67  cents  instead  of  100  cents. 
It  must  be  apparent  to  every  candid  mind  that  the  hon> 
est  dollar  is  the  creature  of  the  law,  and  that  where 
both  coins,  gold  and  silver,  are  made  legal  tender  in 
payment  of  debts  it  is  an  imperative  necessity  that  both 
be  treated  alike  at  the  money  mints,  in  order  that  the 
coins  may  be  of  equal  value.  The  fact  that  freedom 
at  the  mints  kept  silver  at  par  regardless  of  the  output 
of  the  metals,  and  the  further  fact  that,  when  denied 
the  freedom  of  the  mints,  it  declined  in  value,  in  the 
face  of  a  largely  increased  output  of  gold,  forever  set- 
tles the  status  of  the  honest  dollar.  It  is— yes,  it  must 
be — the  creature  of  the  law. 

I  will  restate  the  proposition  so  that  the  children  can 
comprehend  its  meaning.  The  only  constitutional 
legal  tender  money  consists  of  gold  and  silver  coins, 
authorized  by  act  of  congress  pursuant  to  grant  of 
authority  in  the  Constitution,  which  coins  have  an  equal 
value  upon  an  established  legal  ratio.  To  maintain 
these  coins  at  the  same  value  they  must  receive  the 
same  protection  at  the  money  mints.  The  right  is  now 
denied  silver,  with  the  result  that  its  equal  value  is  de- 
stroyed. The  silver  men  demand  as  of  right  that  silver 
be  restored  to  its  rightful  place  in  our  constitutional 
money  system.  The  bankers  and  gold  men  ask  that 
the  Constitution  be  disobeyed — ^that  gold,  and  only  gold, 
be  made  the  legal  tender  in  payment  of  debts. 

'Will  the  American  people  who  freely  gave  ibeir 
loved  ones  to  die  in  defence  of  the  Constitution  u  ~>til 


(^  SIIiYER  AKD  GOLD. 

the  dead  numbered  864,112,  and  expended  thousands 
of  millions  of  money  to  save  it,  now  obey  it  themselves, 
or  will  they  permit  the  greed  for  gold  to  annul  one  of 
its  plainest  provisions  ?  Shall  we  be  patriots  or  trai- 
tors? 


RON.  JOSEPH  O.  8IBLBY.  648 


CHAPTER  XXXI. 

BY  HOK.  JOSEPH  O.  SIBLEY  OP  PENNSYLVANIA. 

Silver  is  the  only  stable  standard  of  values  main" 
tainiug  at  all  times  its  parity  with  every  article  of  pro- 
duction except  gold.  The  ounce  of  silver,  degraded  by 
infamous  legislation  from  its  normal  mintage  value  of 
1.2929  an  ounce  to  about  60  cants,  has  kept  its  parity 
with  the  ton  of  pig  iron,  the  pound  of  nails,  and  all 
the  products  of  our  iron  mills.  The  ounce  of  silver  has 
maintained  its  parity  with  the  barrel  of  petroleum,  with 
granite  blocks,  with  kiln-burnt  bricks.  With  lumber 
growing  scarcer  year  by  year  it  still  keeps  its  parity. 
It  is  at  parity  with  the  ton  of  coal ;  with  the  mower, 
reaper,  thresher,  the  grain  drill,  the  hoe,  and  the  spade. 
Silver  at  1.2929  and  beef  at  7  cents  per  pound  in  the 
fiirmer's  fields  has  kept  its  parity,  and  the  ounce  of  sil- 
ver at  60  oents  buys  to-day  beef  at  2  cents  per  pound 
on  foot.  The  pound  of  cotton  and  the  ounce  of  silver 
have  never  lost  their  level.  No  surer  has  the  sun  in- 
dicated on  the  dial  the  hour  of  the  day  than  has  the 
ounce  of  silver  shown  the  value  of  the  pound  of  cotton. 
As  surely  as  the  moon  has  given  high  tide  or  low  tide, 
just  so  surely  has  the  ounce  of  silver  given  the  high 
and  low  tide  prices  of  wheat.  The  ounce  of  silver  has 
maintained  its  parity  with  your  railway  dividends,  with 
the  earnings  in  your  shops  '\nd  factories,  in  all  depart- 
ments of  effort. 

If  parity  with  gold  is  demanded,  and  the  Secretary 


M4  8ILVEB  AKD  OOUX 

of  the  treasury  construes  the  law  to  mean  wfieneTV 
demanded  to  pay  gold,  then  let  us  maintain  the  parity 
by  reducing  the  number  of  grains  in  the  gold  dollar 
from  23.22  grains  pure  gold  to  16  gruns,  or  to  such 
number  of  grains  as  will  keep  it  at  parity.  While  we 
may  wrong  by  so  doing  the  creditor  class,  through  the 
increased  value  of  the  products  of  human  industry,  we 
must  remember  that  fot  every  one  creditor  there  are  a 
thousand  debtors ;  and  we  should  remember  that  the 
aim  of  the  government  is  the  greatest  good  to  the 
greatest  number,  and  also  the  mininum  amount  of  eviL 
But  no  such  drastic  measure  is  necessary.  Parity  may 
be  maintained  and  evcxy  declaration  of  governmental 
policy  fully  met  by  accepting  for  all  dues,  public  and 
private,  including  duties  upon  imports,  silver  and 
paper  issues  of  the  nation  of  every  description  what- 
soever. 

In  all  the  gold-standard  nations  destitution  and  misery 
prevail.  With  great  standing  armiejs  in  Europe  out- 
breaks are  not  of  frequent  occurrence,  and  yet  one 
rarely  peruses  his  paper  without  reading  of  these  out- 
breaks. At  Montreal,  St.  Johns,  Newfoundland,  in 
Italy,  in  Spain  and  Portugal,  Sunday  gatherings  in 
Trafalgar  Square,  London,  of  the  thousands  of  unem- 
ployed, where  rioting  is  prevented  only  by  keeping  the 
crowds  in  motion.  In  Nebraska  and  Kansas,  the  land 
of  wheat  and  corn,  we  read  of  starving  households; 
even  in  Ohio  appeals  are  sent  out  for  the  relief  of  thou^ 
sands  of  starving  miners,  and  yet  men  have  the  tern- 

f  erity  to  tell  us  that  the  evils  arise  from  overproduc- 

tion. 

I  Succeeding  the  great  Irish  famine  of  1840,  writers 

speciously  commenting  upon  that  great  disaster,  in 


ROiff.  J08SPH  G.  SIBLBT.  546 

which  thouBands  of  lives  w«re  pinched  out  bj  hungeri 
held  that  Ireland  was  too  densely  populated;  that 
people  starved  because  of  overproduction  of  men» 
women  and  children.  To-day  thousands  of  men, 
women  and  children  are  suffering  the  pangs  of  hunger, 
and  yet  we  are  told  that  this  comes  from  overproduc- 
tion. Is  it  from  overproduction  of  wheat?  People 
are  freezing.  Is  it  because  of  overproduction  of  coal  7 
Multitudes  are  in  rags  and  nakedness.  Is  it  because  of 
overproduction  of  cotton  and  wool  7  We  were  told 
that  we  could  not  hold  bimetallism  because  of  the  over^ 
production  of  silver. 

Men  tell  us  that  there  is  an  overproduction  of  silver, 
and  that  its  price  had  diminished  in  comparison  with 
gold  because  of  its  great  relative  increase.  Such  state- 
ments are  not  only  misleading,  but  absolutely  false. 
Figures  show  that  in  1600  we  produced  27  tons  of  sil- 
ver to  1  ton  of  gold ;  in  1700,  34  tons  of  silver  to  1  ton 
of  gold ;  in  1800,  82  tons  of  silver  to  1  ton  of  gold ;  in 
1848,  81  tons  of  silver  to  1  ton  of  gold ;  while  in  1880 
the  production  of  silver  had  declined  until  we  pro- 
duced 18  tons  of  silver  to  1  ton  of  gold ;  and  in  1890 
but  18  tons  of  silver  to  1  ton  of  gold ;  and  that,  instead 
of  the  ratio  of  coinage  being  increased  above  16  to  1,  if 
relative  production  of  the  two  metals  is  to  determine 
the  ratio,  then  the  ratio  should  have  been  diminished 
rather  than  increased,  and  confirms  the  fact  that  merely 
the  denial  of  mintage  upon  terms  of  equality  with  gold 
is  responsible  for  all  depreciation  in  the  value  of  silver 
bullion. 

All  the  silver  in  the  world  ta4ay  can  be  put  iu  a 
room  66  feet  in  each  dimension,  and  all  the  gold  can 
be  melted  into  a  cube  of  18  or  20  feet    There  are  to- 


646  BILyXE  AHD  QOLI>. 

iaj  Urn  than  twentj-fire  millions  of  bar  direr  in  all 
Borope.  Mr.  St.  John,  the  eminent  banker  of  New 
York,  liad  stated  that  there  was  not  oyer  fire  millions 
of  silver  that  conld  be  made  ayailable  to  send  to  our 
mints.  Begin  to  ooin  silrer  to  the  full  capaoity  of  our 
mints,  and  we  would  have  to  coin  it  for  twenty  jears 
before  giving  to  eaeh  inhabitant  a  per  capita  circulation 
that  France,  the  most  prosperous  nation  in  the  world 
to-daj,  possesses. 

Hen  tell  us  that  money  must  have  intrinsic  valuct 
forgetful  of  the  fisct  that  a  paper  bank  was  estabBshed 
in  Venice  in  the  eleventh  century  whose  bills  of  emis* 
sion  at  no  time  failed  to  command  a  premium  over  and 
above  gold  and  silver.  Historians  inform  us  that  the 
premium  upon  the  paper  over  gold  in  commercial  trans- 
actions rose  as  high  as  82  per  cent.,  until  by  law  the 
Republic  declared  that  it  should  be  iUegal  to  demand  in 
excess  of  20  per  cent,  premium  on  the  paper  money 
over  gold  and  silver  coin  of  standard  value.  That 
bank  was  founded,  stood  the  shock  of  arms,  the  muta- 
tions  of  time  and  governments,  for  five  hundred  years, 
and  until  the  day  that  Napoleon  marched  his  conquer- 
ing legions  into  Venice.  The  faith  and  the  property  of 
the  Venetian  Republic  stood  as  a  sure  foundation  for 
issue. 

The  struggle  to-day  Is  loetween  the  debtor  and  credit 
tor  classes.  With  one-half  the  world's  money  of  final 
account  destroyed,  the  (Creditor  can  demand  twice  as 
much  of  the  products  of  your  field,  your  shop,  and 
your  enterprise  and  labor  for  his  dues.  In  this  stnii^- 
gle  between  debtor  and  creditor  the  latter  has  taken 
undue  advantage  and  by  legislation  doubled  and  trebled 
the  Vblume  of  the  debt.    For  example,  suppose  jtrtt  had 


HOK.  JOSEPH  a  BIBLET.  5iT 

^Ten  a  note  to  your  neighbor  promiaing  to  pay,  oiie 
year  aft^r  date,  1,500  busliels  of  wheat.  Tou  thresh 
the  grain,  measure  it  into  the  bin,  and  notify  your 
creditor  that  the  wheat  is  at  his  disposal.  He  goes  to 
the  granary,  sacks  the.  wheat,  and  then  brings  up  your 
note  and  states,  ^*  I  have  taken  500  bushels,  which  I 
have  endorsed  on  your  note.  I  will  call  on  you  for  the 
balance  when  next  year's  crop  is  harvested/'  You  say, 
**  Why  did  you  not  take  all  the  wheat  and  let  me  make 
full  payment?*'  The  note  holder  answers.  ^^I  did 
take  all  the  wheat,  and  there  were  only  500  bushels  in 
the  bin  instead  of  1,500/' 

Tou  fail  to  understand  how  that  can  be  possible. 
You  know  that  you  threshed  out  and  measured  into 
that  bin  1,500  bushels  of  wheat.  You  go  to  the  gran- 
ary and  find  that  it  is  true.  No  wheat  is  there,  but 
there  appears  to  be  an  enormous  lot  of  wheat  upon  those 
wagons  for  500  bushela;  and  you  ask  the  note  holder, 
**  Who  measured  this  wheat  ?  and  let  me  see  how  you 
measured  it."  You  see  something  in  the  form  of  a 
measure  about  as  large  as  a  washtub,  and  you  ask  him 
what  that  is.  He  tells  you  that  is  the  half>bushel  meas- 
ure which  he  measured  your  wheat;  but  you  reply, 
**  My  dear  sir,  that  holds  more  than  half  a  bushel ;  that 
measure  will  hold  6  pecks."  He  answers,  ^  Correct,  it 
does  hold  six  pecks,  but  it  now  takes  12  pecks  to  make 
a  bushel,  instead  of  4  pecks.  Together  with  other 
friends  who  had  wheat  coming  to  us  we  went  before  the 
Committee  on  Coinage,  Weights,  and  Measures  and 
secured  the  passage  of  a  legislative  enactment,  that  it 
should  require  18  pecks  instead  of  4  peckato  make  a 
bushel.  We  have  secured  this  legislation  for  the 
proper  protection  of  the  holdera  of  wheat  oUigadonai 


548  SILVER  AND  GOLD. 

for  our  own  security,  and  for  fear  that  we  should  h^ 
come  timid  and  lose  confidence  in  jour  ability  to  pay 
unless  we  changed  the  standard  of  measure."  But  you 
reply,  **Sir,  we  who  have  obligations  maturing,  con- 
tracts long  outstanding,  have  never  asked  or  consented 
to  the  enactment  of  such  legislation.  Our  representa- 
tives in  congress  never  permitted  us  to  understand  that 
any  such  legislation  was  pending.'*  He  replies,  *'  Sir, 
you  might  have  known  it  had  you  desired  to  do  so,  or 
bad  you  kept  yourself  as  well  posted  in  legislative  af- 
fairs as  do  the  holders  of  obligations  calling  for  prod- 
ucts of  the  soil  for  payment.  We  have  our  represen- 
tatives in  congress.  We  reward  them  for  their  fidelity 
to  our  interests ;  we  punish  them  for  fidelity  to  yours. 
You  are  not  capable  of  comprehending  problems  of 
such  intricate  nature  as  are  involved  in  the  system  of 
weights  and  measures.  While  you  have  been  debating 
the  tariff  we  have  been  students  of  the  financial  school 
taught  by  Rothschild  and  his  American  allies.  You 
should  not  produce  so  much  wheat,  or  should  devote 
your  attention  to  better  tillage  of  the  soil.  You  should 
be  steadfast  and  loyal  to  our  congressmen  and  to  our 
party.  Vote  the  straight  ticket  and  beware  of  the  evils 
of  overproduction." 

This,  in  my  judgment,  is  not  a  far-fetched  illustra- 
tion, but  depicts  the  exact  condition  against  which  pro- 
duction to-day  protests.  The  debtor's  obligation,  true, 
does  not  call  for  wheat  in  specific  terms.  It  calls  for 
dollars,  but  by  legislation  we  have  made  the  dollar 
three  times  as  large  in  purchasing  power  or  in  measur« 
ing  values  as  it  was  before.  We  talk  about  gold  being 
the  only  money  of  intrinsic  value,  and'  attempt  to 
befog  and  mystify  the  masses  by  telling  them  that  it 


HON.   JOSEPH   C.   S1BLE\  346 

Ites  Intrinsic  value,  when  its  value  is  merely  the  artifi- 
cial product  of  legislation. 

Enact  a  law,  to  be  rigidly  enforced,  providing  that  no 
meat  of  any  kind,  whether  **  fish,  flesh  or  fowl,"  ex- 
cept mutton,  shall  be  used  for  food.  What  will  be  the 
intrinsic  value  of  your  beef  cattle,  of  your  swine,  your 
poultry,  and  your  fish  to-morrow?  The  mutton- 
headed  monoroetallists  would  tell  you  that  the  great 
increase  in  the  value  of  mutton  was  because  of  its  in- 
trinsic worth.  Let  this  nation  and  the  commercial  na- 
tions  of  the  globe  enact  a  law  to-morrow,  that  neither 
cotton,  nor  silk,  nor  fabric  should  be  used  for  clothing 
or  covering,  forbid  the  factories  of  the  world  to  spin  or 
weave  aught  but  wool,  and  what  will  be  the  intrinsic 
value  of  cotton  or  silk  thereafter?  Wool  will  be  king ; 
its  value  will  be  enhanced,  but  cotton,  hemp,  and  silk 
will  be  as  valueless  as  weeds  or  as  gossamer  webs. 

With  the  mints  open  to  free  and  unlimited  coinage 
of  both  gold  and  silver  there  has  never  been  a  moment 
when  silver  has  not  maintained  its  parity  with  gold, 
and  at  a  ratio  of  16  to  1  commanded  a  premium  of 
more  than  8  per  cent,  over  gold.  And  if,  by  some  for* 
tunate  discoveries  to-morrow,  gold  should  be  found  in 
great  quantities  sufficient  to  lessen  the  income  of  the 
annuitant,  the  bondholding,  or  the  fixed-income  class, 
there  would  arise  a  demand  for  the  demonetization  of 
gold  and  the  establishment  of  the  pearl,  ruby,  or  dia- 
mond standard  of  values.  Whatever  standard  can 
bring  to  grasping  hands  and  greedy  hearts  the  most  of 
the  toil,  the  sweat,  and  unrequited  effort  of  his  fellow- 
man,  this  standard  will  be  demanded  by  the  represent 
tatives  of  greed,  and  must  be  resisted  by  those  who 
present  humanity  and  Christianity. 


$$0  dtLirsE  Ain>  qoij>. 

Wa  are  not  iepeDdent  apoQ  the  opinion  of  mo9io« 
metallist  or  biinetallist.  There  have  been  standardi 
erected  whereby  men  can  unerringly  determine  whether 
yalues  have  appreciated  or  depreciated  in  comparison 
with  gold.  In  1845  the  Loudon  Economist  sought  to 
ascertain  the  range  of  values  which  should  determine 
any  increase  or  decline  thereof.  They  took  the  yalues 
of  twenty-two  leading  articles  of  production  and  con- 
sumption in  Great  Britain,  from  1845  to  1650,  taking 
enough  units  to  make  100  or  one  dollar.  For  instance, 
one  unit  of  wheat,  one  dollar ;  ten  units  of  cotton,  one 
dollar ;  three  units  of  wool,  one  dollar,  and  thus 
through  twenty-two  leading  articles  of  production  and 
consumption,  with  enough  units  of  each  of  the  giyen 
articles  at  the  average  range  of  values  during  the  five 
years  nomed  to  establish  a  standard.  Therefore,  the 
value  of  the  twenty-two  leading  articles  forming  the 
basis  of  computation  would  add  2,200;  If  prices 
should  vary  so  that  one  unit  of  wheat  should  be  worth 
1.25,  ten  units  of  cotton  1.10,  three  units  of  wool  90, 
the  average  rise  and  fall  would  be  indicated  by  the 
total  footings  of  the  twenty-two  leading  articles  thus 
forming  the  index  number. 

The  results  of  these  tables  are  astonishing.  The 
average  of  values  which  from  1845  to  1850  had  shown 
2,200  as  the  index  number,  owing  to  the  discoveries  of 
the  gold  mines  of  California,  adding  to  the  volume  of 
money  of  final  account,  steadily  increased.  The  out- 
put of  Australia  commencing  to  come  into  the  chan- 
nels of  commerce  in  1858,  added  still  more  to  the  foot- 
ings of  the  index  columns.  Tear  by  year  values  in- 
isreased,  until  in  1864  high-water  mark  was  recorded, 
and  the  index  number  was  ihen  8,780.    From  1686  to 


t6^.  JM«d^tt  c.  stbLxr.  ^1 

IStt  fnCfiB  declined,  largely  owing  to  the  great  con* 
tiMtioa  in  th^  Yolume  of  American  currency  which 
tended  to  reduj)e  the  value  of  American  products*  But 
the  real  depreciation  in  the  total  footings  did  not  set  in 
until  the  United  States,  following  the  lead  of  Germany, 
demonetised  silver*  From  that  time  to  this  the  decline 
has  been  rapid. 

Prior  to  1878  but  two  nations,  Oreat  Britain  and 
Portugal,  were  upon  the  gold  basis.  They  had  a  popu- 
lation of  42,000,000  of  people.  To-day  the  same,  or 
even  a  less  amount  of  gold,  is  divided  among  the  820,- 
000,000  of  people  who  have  adopted  the  gold  standard. 
The  result  has  been  a  continuous  struggle  for  gold  and 
a  continuous  shrinkage  of  values  proportionate  to  the 
enhancement  of  gold.  On  the  1st  day  of  January, 
1898,  the  index  number  was  2,121  showing  a  range  of 
values  below  those  obtaining  in  1845-1850.  The  1st 
day  of  January,  1894,  the  index  number  was  2,082 ; 
and  on  the  Ist  of  January,  1895,  the  index  number  is 
1,928,  or  a  decline  of  nearly  50  per  cent,  in  values  be- 
low the  year  1864,  and  a  decline  in  values  of  about  12 
per  oent.  below  those  prevailing  in  the  period  embraced 
between  the  year  1845  and  1850. 

This  decline  must  be  checked,  or  we  mast  return  to 
the  condition  of  the  middle  ages,  to  its  miseries,  to  its 
woes,  to  a  period  when  money  was  so  valuable,  during 
reign  of  the  Henrys,  that  seven  cents  measured  as 
much  of  the  products  of  the  field,  the  brawn,  and  the 
muscle  as  are  measured  by  one  dollar  of  the  present 
day. 

We  have  plucked  the  deadly  Upas  tree  from  an  alien 
soil  and  planted  it  in  the  free  soil  of  this  Union.  What 
are  its  firuits  ?    It  has  given  the  homesteads  of  thou- 


66S  fifLYKB  AlTD  GOLDu 

tands  of  toQen  to  the  creditor.  It  baa  pyen  on^thfrd 
of  oar  lailwaj  mileage  to  receiyera.  It  haa  giveif  re* 
daced  earnings  to  eyery  one  of  the  other  two-thirda» 
and  diyidenda  npon  atock  and  interest  npon  bonds  to 
but  few.  It  has  giyen  idleness  to  foor  millions  of 
would-be  toilers  in  shop  and  field.  It  has  giyen  pro- 
duotiye  capital  no  scope  for  use  and  little  or  no  return 
for  risks  assumed.  It  has  giyen  the  silyer  miners  ruin. 
It  has  giyen  the  farmer  40  cents  for  wheat  and  the  cot- 
ton planter  but  little  oyer  4  cents  for  his  cotton.  It 
has  produced  a  Republican  majority  of  about  150  in 
congress.  It  lias  giyen  nakedness,  hunger  and  cold  to 
millions  of  men,  women,  and  helpless  children.  It  haa 
produced  a  sea  of  tears,  an  ayalanche  of  groans  and 
prayers  for  succor.  It  has  blighted  hope  and  paralyzed 
aspiration  in  a  million  homes.  It  has  produced  a  crop 
of  defaulters  and  criminaLs  until  the  jails  and  prisons 
oyerflow.  It  has  produced  mobs  and  riots  and  the  call- 
ing for  armed  forces  of  the  nation  to  check  and  controL 
It  has  produced  9100,000,000  more  of  goyemment 
bonds,  which  are  so  many  financial  fetters  to  shackle 
the  feet  of  industry. 

The  cause  a^  trial  is  that  of  creditor  yersus  debtor ; 
humanity  yersus  selfishness ;  truth  yersus  error — a  free 
goyernment  such  as  our  fathers  designed  to  found 
yersus  the  rule  of  an  organized  plutocracy.  Every 
great  statesman  and  political  economist  of  the  last 
three  hundred  years  has  laid  down  as  a  political  axiom 
that  the  yalues  of  property  are  determined  by  the 
yolume  of  money  proportionate  to  the  yolume  of  trade 
transactions.  I  shall  quote  in  an  appendix  the  declara- 
tious  of  many  great  thinkers  upon  this  topic  from  the 
days  of  John  Locke  and  Adam  Smith  down  to  the 


HOK.   JOSEPH  C.   &IBL£Y.  ^8 

present  moment,  which,  briefly  condensed,  may  be  sum* 
marized  as  follows : 

Double  the  volume  of  money,  you  double  the  yJEilue 
of  products. 

Divide  the  volume  of  money,  and  you  divide  the 
value  of  products. 

Divide  the  volume  of  money,  you  double  the  debt. 

Double  the  volume  of  money  and  you  divide  the 
debt. 

Nothing  more  clearly  illustrates  the  increasing  value 
of  money  than  an  example  the  force  of  which  must  be 
apparent  to  the  dullest  intellect.  If  a  man  had  sold 
his  farm  for  $80,000  in  1878  and  buried  his  money  deep 
into  the  earth,  or,  as  men  do,  placed  it  at  interest  at  6 
per  cent.,  in  addition  to  his  interest,  with  one-third  of 
his  980,000  he  can  to-day  repurchase  the  same  farm.  If 
this  man  has  gained  $20,000  and  the  interest  on  $30,- 
000  for  twenty  years,  then  certainly  the  man  who  pur- 
chased the  farm  has  lost  $20,000  of  his  purchase  money 
and  the  interest  on  $80,000.  If  a  farmer  had  sold 
$10,000  worth  of  horses  in  1874  he  could  purchase 
others,  their  equal  to-day,  for  $2,000.  If  he  had  sold 
his  beef  cattle  from  off  his  farm  for  $6,000,  he  cohUI 
buy  back  to-day  an  equal  or  greater  weight  of  beef  cat- 
tle for  $2,000.  Money  has  been  magnified;  sources 
and  profits  of  industry  have  been  minimized.  If  the 
man  who  sold  the  farm  for  $80,000  in  1878  bad  placed 
it  at  interest  at  6  per  cent,  it  would  amount  to  more 
than  $100«000  in  1894  with  interest  annually  added  to 
principal  If  the  one  man  has  gained  through  appreci- 
ation of  money  and  interest  more  than  $90,000  net,  tha 
man  who  purchased  has  certainly  lost  an  equal  isum. 
By  vicious  legislation  money  has  been  made  a  moaarch, 


wUb  iniottiy  m4  prodoetipii  lutT^  i>f!OPiM  )mggUB  oft 
tlie  liMt  of  tfa*  Mrth. 

If «i  frlv>  work  i^gii  tho  fiurm,  in  (ho  shop  or  in  tho 
mino  an  ptono  to  think  that  the  Yolome  of  money  in  * 
nation  end  mrnttem  of  finenoe  «ie  rabjeete  in  which 
necamrily  they  can  have  bnt  paaiing  inteieet,  and 
reUigate  die  entoe  eubjeet  to  the  ^^maateie  of  &ieiioe,** 
to  thoae  who  loan  money,  deal  inatodcs,  manage  banks, 
and  operate  trust  companies*  This  indifference  to  such 
subjects  has  led  mainly  to  the  condition  which  confronts 
tlie  nations  of  the  world  to-day.  The  most  <auelul 
compilations  of  the  last  census  indicate  that  in  1890 
three*tenths  of  1  per  cent  of  the  population  of  the 
United  States  received  more  than  70  per  cent  of  the 
total  increase  of  wealth,  or  that  of  the  increase  of  na- 
tional wealth  in  the  last  ten  years,  of  every  one  hun- 
dred dollars  of  increase  1  man  out  of  every  ftOO  men 
took  seventy  dollars  and  the  other  299  man  had  thirty 
dollars  to  be  divided  among  them,  or  about  ten  cents 
apiece. 

Now  let  us  state  the  problem  fairly  and  honestly*  If 
in  any  given  community  of  800  citisens  one  man  was 
taking  seventy  dollars  out  of  each  one  hundred  doUars 
that  was  earned  by  the  united  efforts  of  all  that  com- 
munity, how  long  would  it  be  untO  you  could  make  tfie 
299  men  see  that  they  were  called  upon  to  take  more 
than  a  passing  interest  in  financial  questions  so  far  as 
they  concerned  that  community  ?  What  Is  the  plain 
duty  of  the  299  citizens  ?  Clearly  not  to  despoil  or 
rob  the  man  of  his  possessions,  but  by  united  offMrt  to 
assist  one  another  in  the  securing  of  such  Ugislators  as 
will  enact  laws  so  beneficent  in  their  operations  as  will 
Make  such  absorption  a  future  impoasibility.    Let  me 


fsax  warn  hfom  juirtjrim  spoorkf :  Tbh  womb  uribo 
1^  th6  mmrmAy  dolkn  spriiigB  a  gitMit  iasiia  thnMifh 
tfie  odiuiuui  4>f  hit  Jievrqpaper  as  to  wbethar  jt  miui 
diotild  WMT  boo^  Iieels  8  inebes  high  or  no  heeli  on  his 
boots.  The  ftrife  waxes  hotter  and  hotter,  the  800  men 
diTide  their  jEt^ces^  160  for  boot  heels  thaeee  inches  bi|^, 
mod  149  against  an  j  heels,  and  while  the  votes  Me  being 
^wanted  he  is  secretly  laying  his  plans  to  steal  every 
pair  of  boots  and  shoes  in  the  whole  eommnnity.  Tlie 
old  Roman  maxim,  ^  Divide  and  mle,**  is  employed  to- 
day as  mnoh  as  ever  in  the  palmiest  days  of  Boman 
power«  The  299  men  strive  with  no  conoert  of  action, 
hot  poll  this  way  an4  that,  and  their  efforts  redound  in 
the  end  not  to  the  well-being  of  all,  bat  to  the  farther 
aggrandiiement  of  the  one  who  upon  fidse  issoes  has 
divided  them. 

The  body  politic,  financial,  social,  and  indostrial,  is 
to-day  afflicted  with  a  thousand  ills,  and  each  ill  has 
developed  a  horde  of  specialists  who  have  some  specific 
xemedy  for  each  separate  malady.  Apply  the  remedy 
for  the  one  great  evil,  arrest  the  py»mia  which,  un- 
checked, most  destroy  the  whole  system,  and  the  thoa* 
sand  wrongs  and  ills,  which  are  but  symptoms  of  the 
nniversal  disease,  need  no  remedy,  for  with  the  porify- 
ing  of  the  lifeblood  these  excrescences  and  tumocs,  by 
the  natoral  process  of  absorption,  will  disappear ;  the 
receiverships,  the  bankruptoies,  the  closed  factories,  or 
those  operated  at  a  loss,  the  profitless  investments,  the 
mortgaged  homes,  the  paralyzed  aspirations,  the  idle 
men,  the  tramps,  the  strikes,  the  lockouts,  socialism,  and 
anarchy  disappear  as  the  summer  clouds  before  the 
noonday  sun. 

Anest  the  decline  of  values  of  all  forms  of  propertj 


ftlLyJUfc  AND  QOJJK 


arising  through  appreoiat^n  of  gold,  uid  komaiiil^ 
takes  on  -new  hopes  and  girds  herself  for  conflicts,  not 
among  its  fellows  but  for  conquests  oyer  the.  material 
universe.  Fix  at  some  point  through  bimetallism  sta- 
bility, of  yalueSf  where  investment  shall  unerringly 
know  that  through  appreciation  of  gold  and  debase- 
ment in  value  of  all  products  there  shall  be  no  longer 
from  year  to  year  a  continuous  decline  of  the  latter, 
and  at  once  you  inspire  courage  and  faith  in  every 
legitimate  enterprise  and  activity  in  every  field  of  use- 
fulness. But  continue  the  dwarfing  process*  the  crush- 
ing, grinding,  resistless,  and  relentless  system  of  gold 
monometallism,  and  with  it  you  discourage  enterprise, 
dampen  ardor,  dispel  hope;  and  destroy  faith ;  and  then 
the '  teachings  of  the  Master  will  be  reversed,  and  the 
provident  and  faithful  steward  will  be  he  who  alone  has 
buried  his  talent  in  the  napkin,  while  the  man  who  had 
the  five  talents  and  used  them  in  the  fields  of  human 
activity  will  be  the  one  who  wiU  return  to  his  lord 
empty  handed  to  merit  rebuke  for  having  attempted  to 
use  Jus  money  for  his  own  and  society's  betterment. 


THB  PABTIBS  AND  THB  GANDUDATB8.  557 


CHAPTER  XXXIL 

ATTITUDE   OP   THE    PARTIES   AND    CANDIDATES    ON 

THE  SII<VER  QUESTION. 

FINANCIAI.  PLANK  IN  THE    PLATFORM   IdOPTED  BY 
THE  REPUBLICAN  CONVENTION  AT  ST.  LOUIS, 

JUNE  17th,  1896. 

The  Republican  party  is  unreservedly  for  sound 
money.  It  caused  the  Bnaotment  of  the  law  pro-- 
viding  for  the  resumption  of  specie  payments  in 
1879.  Since  then  every  dollar  has  been  as  good 
as  gold. 

Wa  are  unalterably  opposed  to  every  measure 
calculated  to  debase  our  currency  or  impair  the 
credit  of  our  country.  We  are,  therefore,  opposed 
to  the  free  coinage  of  silver  except  by  Inter- 
national agreement  with  the  leading  commercial 
nations  of  the  world,  which  we  pledge  ourselves 
to  promote,  and  until  such  agreement  can  be  ob- 
tained the  existing  gold  standard  must  be  pre- 
served. All  our  silver  and  paper  currency  must 
be  maintained  at  parity  with  gold,  and  we  favor 
an  measures  designed  to  maintain  inviolable  the 
obligations  of  all  our  money,  whether  coin  or 
paper,  at  the  present  standard— the  standard  of 
the  most  enlightened  nations  of  the  earth. 


868  OL^Bt  Ain>  GOLD. 

WILLIAM  Mckinley, 

RBPUBUCAK   CAlfBIDATB    FOR    PRBSIDBNT    OP   I'HB 
UNTTBD  STATBSy  ON  THE  SILVER  QUESTION. 

The  national  credit,  which  has  thus  far  fortunately 
resisted  every  assault  npon  it,  must  and  will  be  up- 
held and  strengthened.  If  sufficient  revenues  are 
provided  fw  the  support  erf*  the  government  there  will 
be  no  necessity  for  borrowing  money  and  increasing 
the  public  debt  The  complaint  of  the  people  is  not 
against  the  Administration  for  borrowing  money  and 
issuing  bonds  to  preserve  the  credit  of  the  country, 
but  against  the  ruinous  policy  which  has  made  this 
necessary.  It  is  but  an  incident,  and  a  necessary 
one,  to  the  policy  which  has  been  inaugurated.  The 
inevitable  effi^t  of  such  a  policy  is  seen  in  the  de- 
ficiency of  the  United  States  Treasury,  except  bs  it 
is  replenished  by  loans  and  in  the  distress  of  the  peo- 
ple, who  are  suflfering  because  of  the  scant  demand 
for  either  their  labor  or  the  products  of  their  labor. 
Here  is  the  fundamental  trouble,  the  remedy  for 
which  is  Republican  opportunity  and  duty. 

During  all  the  years  of  Republican  control  follow- 
ing resumption  there  was  a  steady  reduction  of  the 
public  debt,  while  the  gold  reserve  was  sacredly 
maintained,  and  our  currency  and  credit  preserved 
without  depreciation,  taint  or  suspicion.  If  we  would 
restore  this  policy  that  brought  us  unexampled  proa- 
perity  for  more  than  thirty  years  under  the  most  tty* 
ing  oooditieoa  ever  known  in  this  country,  the  policy 
by  which  we  made  and  bought  more  goods  at  iMme 
and  sold  more  abroad,  the  trade  balanot  woiM  be 
quickly  tamed  m  our  £Kvor,  and  gold  nicmld  come  to 


THB  PABm  AKD  THB  OAKDIDATBEI.  S50 

t»  and  not  go  from  us  in  the  stttlement  of  all  such 
balances  in  the  future. 

The  party  that  supplied  by  legislation  the  vast 
revenues  for  the  conduct  of  our  greatest  war,  and 
promptly  restored  the  credit  of  the  country  at  its 
close,  and  that  from  its  abundant  revenues  paid  off  a 
large  share  of  the  debt  incurred  in  this  war,  and  that 
resumed  specie  payments  and  placed  our  paper  cur- 
rency upon  a  sound  and  enduring  basis,  can  be  safely 
trusted  to  preserve  both  our  credit  and  currency  with 
honor,  stability  and  inviolability. 

The  American  people  hold  the  financial  honor  of 
our  government  as  sacred  as  our  flag,  and  can  be  re- 
lied upon  to  guard  it  with  the  same  sleepless  vigil- 
ance. They  hold  its  preservation  above  party  fealty, 
and  have  often  demonstrated  that  party  ties  avail 
nothing  when  the  spotless  credit  of  our  country  is 
threatened.  The  money  of  the  United  States,  and 
every  kind  or  form  of  it,  whether  of  paper,  silver  or 
gold,  must  be  as  good  as  the  best  in  the  world.  It 
must  not  only  be  current  at  its  full  face  value  at 
home,  but  it  must  be  counted  at  par  in  any  and  every 
commercial  centre  of  the  globe. 

The  sagacious  and  &r-seeing  policy  of  the  great 
men  who  founded  our  government,  the  teachings  and 
acts  of  the  wisest  financier  at  every  stage  in  our 
history,  the  steadfast  £fiith  and  splendid  achievements 
of  the  great  party  to  which  we  belong,  and  the  genius 
and  integrity  of  our  people  have  always  demanded 
thiS|  and  will  ever  maintain  it.  The  dollar  paid  to 
the  finmer,  the  wage-earner  and  the  pensioner  must 
continue  forever  equal  in  purchasing  the  debt-paying 
power  to  the  dollar  paid  to  any  government  ctecBtor. 


660  ISILYEK    AND  GOLD. 

Recent  events  have  imposed  upon  the  patriotic 
people  of  this  country  a  responsibility  and  a  dnty 
greater  than  that  of  any  since  the  civil  war.  Then  it 
was  a  struggle  to  preserve  the  government  of  the 
United  States.  Now  it  is  a  struggle  to  preserve  the 
financial  honor  of  the  government  of  the  United 
States. 

Then  it  was  a  contest  to  save  the  Union.  Now  it 
is  a  contest  to  save  spotless  credit  Then  section  was 
arrayed  against  section.  Now  men  of  all  sections 
can  unite,  and  will  unite  to  rebuke  the  repudiation  of 
our  obligations  and  the  debasement  of  our  currency. 

In  this  contest  patriotism  is  above  party,  and 
national  honor  is  dearer  than  any  party  name.  The 
currency  and  credit  of  the  government  are  good  now, 
and  must  be  kept  good  forever.  Our  trouble  is  not 
with  the  character  of  the  money  we  have,  but  with 
the  threat  to  debase  it.  We  have  the  same  currency 
that  we  had  in  1892 — ^good  the  world  over,  and  un- 
questioned by  any  people.  Then,  too,  we  had  unex- 
ampled credit  and  prosperity.  Our  difficulty  now  is 
to  get  that  money  in  circulation  and  invested  in  pro* 
ductive  enterprises  which  furnish  employment  to 
American  labor. 

This  is  impossible  with  the  distrust  that  hangs 
over  the  country  at  the  present  time,  and  every  eflFort 
to  make  our  dollarF,  or  any  one  of  them,  worth  less 
than  one  hundred  cents  each,  only  serve  to  increase 
that  distrust,  • 

What  we  want  is  a  sound  policy,  financial  and  in- 
dustrial, which  will  give  courage  and  confidence  to 
lall,  for  when  that  is  done,  the  money  now  unem- 
ployed because  of  fear  for  the  future  and  lack  of  con- 


THB  PASTIES  AND  THB  CANDIDATES.  561 

fidence  in  investment,  will  quickly  appear  in  the 
channels  of  trade. 

The  employment  of  our  idle  money,  the  idle  money 
that  we  already  have,  in  gainfhl  pursuits  will  put 
every  idle  man  in  the  country  at  work,  and  when 
there  is  work  and  wages  there  are  consumers  who 
constitute  the  best  market  for  the  products  of  our 
soil. 

Having  destroyed  business  and  confidence  by  a  free 
trade  policy,  it  is  now  proposed  to  make  things  still 
worse  by  entering  upon  an  era  of  depreciated  cur- 
rency. Not  content  with  the  inauguration  of  the 
ruinous  policy  which  has  brought  down  the  wages  of 
the  laborer  and  the  price  of  farm  products,  its  advo- 
cates now  offer  a  new  policy  which  will  diminish  the 
value  of  the  money  in  which  wages  and  products  are 
paid. 

Against  both  of  these  we  stand  opposed.  Our  creed 
embraces  an  honest  dollar,  an  untarnished  national 
credit,  adequate  revenues  for  the  uses  of  the  govern- 
ment, protection  to  labor  and  industry,  preservation 
of  the  home  market  and  reciprocity  which  will  ex- 
tend our  foreign  markets. 

Upon  this  platform  we  stand,  and  submit  its  decla- 
rations to  the  sober  and  considerate  judgment  of  the 
American  people. 

We  must  have  a  sound  dollar,  as  sound  as  the 
Government  and  as  untamishable  as  its  flag ;  a  dollar 
that  is  good  not  only  at  home,  but  good  wherever 
trade  goes ;  a  dollar  that  is  as  good  in  the  farmers' 
and  workingm  en's  hands  as  in  the  hands  of  the 
manufacturer  or  capitalist 


562  BTLVISR    AKD  GOLD. 

GARRET  A.  HOBART, 

REPUBUCAN    CANDIDATE    FOR    VICE-PRESIDENT   OF 
THE  UNITED  STATES,  ON  THE  SILVER  QUESTION. 

Uncertainty  or  instability  as  to  the  money  question 
involves  most  serious  consequences  to  every  interest 
and  to  every  citizen  of  the  country. 

The  gravity  of  the  question  cannot  be  over- 
estimated. There  can  be  no  financial  security,  no 
business  stability,  no  real  prosperity  where  the  policy 
of  the  government  as  to  that  question  is  at  all  a 
matter  of  doubt 

Gold  is  the  one  standard  of  value  among  all  en- 
lightened commercial  nations.  All  financial  trans- 
actions of  whatever  character,  all  business  enter- 
prises, all  individual  or  corporate  investments  are 
adjusted  to  it  An  honest  dollar,  worth  100  cents 
everywhere,  cannot  be  coined  out  of  fifty-three  cents 
worth  of  silver,  plus  a  legislative  fiat 

Such  a  debasement  of  our  currency  would  inevit- 
ably produce  incalculable  loss,  appalling  disaster,  and 
national  dishonor.  It  is  a  fundamental  principle  in 
coinage,  recognized  and  followed  by  all  the  statesmen 
of  America  in  the  past  and  never  yet  safely  departed 
from,  that  there  can  be  only  one  basis  upon  which 
gold  and  silver  may  be  concurrently  coined  as  money, 
and  that  basis  is  equality,  not  in  weight,  but  in  the 
commercial  value  of  the  metal  contained  in  the  re- 
spective coins.  This  commercial  value  is  fixed  by 
the  markets  of  the  world,  with  which  the  greatest 
interests  of  our  country  are  necessarily  connected  by 
innumerable  business  ties,  which  cannot  be  severed 
or  ignored.    Great  and  self-reliant  as  pur  country  is, 


¥hb  pabtibb  and  thb  candidates.  563 

it  is  jg;reat  not  alone  within  its  own  borders  and  upon 
its  own  resources,  but  because  it  also  reaches  out  to 
the  ends  of  the  earth  in  all  the  manifold  depart- 
ments of  business,  exchange  and  commerce,  and  must 
maintain  with  honor  the  standing  and  credit  among 
the  nations  of  the  earth. 

The  question  admits  of  no  compromise.  It  is  a 
vital  principle  at  stake,  but  it  is  in  no  sense  partisan 
or  sectional.  It  concerns  all  the  people.  Ours,  as 
one  of  the  foremost  nations,  must  have  a  monetary 
standard  equal  to  the  best 

It  is  of  vital  consequence  that  this  question  should 
be  settled  now  in  such  a  way  as  to  restore  public  con- 
fidence, here  and  everywhere,  in  the  integrity  of  our 
purpose.  A  doubt  of  that  integrity  among  the  other 
great  commercial  countries  of  the  world  will  not  only 
cost  us  millions  of  money,  but  that  which,  as  patriots, 
we  should  treasure  still  more  highly— our  industrial 
and  commercial  supremacy. 


FINANCIAL  PLANK  IN  THB  PLATFORM    ADOPTED  BY 
THE  DEMOCRATIC  CONVENTION  AT  CHICAGO, 

JULY  8th,    1896. 

Recognizing  that  the  money  system  is  paramount 
to  all  others  at  this  time,  we  invite  attention  to 
the  fact  that  the  Federal  Constitution  names  sli- 
ver and  gold  together  as  the  money  metals  of  the 
United  States,  and  that  the  first  coinage  law 
passed  by  Congress  under  the  Constitution  made 
the  silver  dollar  the  monetary  unit  and  admitted 
gold  to  free  coinage  at  a  ratio  based  upon  the 
silver  dollar  unit. 

We  declare  that  the  act  of  1873  demonetizing 
silver  without  the  knowledge  or  approval  of  the 


564  BCLYBB    AKD  GOXJ), 

American  people  has  resulted  in  the  appreoiation 
of  gold  and  a  corresponding  fall  in  the  prices  of 
commodities  produced  by  the  people;  a  heavy 
increase  in  the  burden  of  taxation  and  of  all 
debts  public  and  private;  the  enrichment  of  the 
money  lending  class  at  home  and  abroad ;  pro-< 
tection  of  industry  and  impoverishment  of  the 
people. 

We  are  unalterably  opposed  to  monometallism, 
which  has  locked  fast  the  prosperity  of  an  indus- 
trial people  in  the  paralysis  of  hard  times.  Gold 
monometallism  is  a  British  policy  and  its  adop- 
tion has  brought  other  nations  into  financial  ser- 
vitude to  London.  It  is  not  only  un-Amerloan  but 
anti-American,  and  it  can  be  fastened  on  the 
United  States  only  by  the  stifling  of  that  spirit 
and  love  of  liberty  which  proclaimed  our  political 
independence  in  1776  and  won  it  in  the  War  of 

the  Revolution. 

We  demand  the  free  and  unlimited  coinage  of 
both  gold  and  silver  at  the  present  legal  ratio  of  16 
to  1,  without  waiting  for  the  aid  or  consent  of  any 
other  nation.  We  demand  that  the  standard  sil- 
ver dollar  shall  be  a  full  legal  tender,  equally  with 
gold,  for  ail  debts,  public  and  private,  and  we 
favor  such  legislation  as  will  prevent  for  the 
future  the  demonetization  of  any  kind  of  legal 
tender  money  by  private  contract. 

We  are  opposed  to  the  policy  and  practice  of 
surrendering  to  the  holders  of  obligations  of  the 
United  States  the  option  reserved  by  law  to  the 
government  of  redeeming  such  obligations  in 
either  silver  coin  or  gold  coin. 

We  are  opposed  to  the  issuing  of  Interest-bear- 
ing bonds  of  the  United  States  in  time  of  peace, 
and  condemn  the  trafficking  with  banking  syndi- 
cates, which  in  exchange  for  bonds,  and  at  an 
enormous  profit  to  themselves,  supply  the  Federal 
Treasury  with  gold  to  maintain  the  policy  of  gold 
monometallism. 

Congress  alone  has  power  to  coin  and^  issue 


THB  PABTIE8  AND  THE  OANDIDATBB.  666 

money,  and  President  Jackson  declared  that  this 

power  oould  not  be  delegated  to  corporations  or 

to  Individuals^  We,  therefore,  denounce  the 
Issuance  of  notes  as  money  for  national  banks 

as  in  derogation  of  the  Constitution  and  we  de- 
mand that  all  paper  which  is  made  legal  tender 
for  public  or  private  debts  or  which  is  receivable 
for  dues  to  the  United  States  shall  be  Issued  by 
the  government  of  the  United  States  and  shall 
be  redeemable  In  coin. 


WII,I,IAM  JENNINGS  BRYAN, 

DBMOCRATIC  CANDIDATE  FOR  PRESIDKNT  OP  THB 
UNTTRD  STATESi  ON  THE  SILVER  QUESTION. 

The  humblest  citizen  in  all  the  land  when  called 
to  annor  in  a  righteous  canse  is  stronger  than  all  the 
whole  hosts  of  error  that  they  can  bring.  I  speak  in  de- 
fense of  a  cause  as  holy  as  the  cause  of  liberty, 
the  cause  of  humanity. 

The  minets  who  go  a  thousand  feet  into  the  earth 
or  climb  two  thousand  feet  upon  the  cliSs  and  bring 
forth  £rom  their  hiding  places  the  precious  metals  to 
be  poured  into  the  channels  of  trade  are  as  much 
business  men  as  the  few  financial  magnates  who,  in 
a  back  room,  comer  the  money  of  the  world. 

You  come  to  us  and  tell  us  that  the  great  cities  are 
in  finvor  of  the  gold  standard.  I  tell  you  that  the 
great  cities  rest  U]>on  these  broad  and  fertile  prairies. 
Bum  down  your  cities  and  leave  our  farms ,  and 
your  cities  will  spring  up  as  if  by  magic.  But, 
destroy  our  fiums,  and  the  grass  will  grow  in  the 
streets  of  every  city  in  this  country ; 

W^  shall  dedaxe  that  this  nation  is  able  to  legislate 


666  8ILVEB   AND  OOLl>. 

for  its  own  people  on  every  question,  without  waiting 
for  the  aid  or  consent  of  any  other  nation  on  earth, 
and  upon  that  issue  we  expect  to  carry  every  single 
State. 

We  go  forth  confident  that  we  shall  win.  Why? 
Because  upon  the  paramount  issue  in  this  campaign 
there  is  not  a  spot  of  ground  upon  which  the  enemy 
will  dare  to  challenge  battle.  Why,  if  they  tell  us 
that  the  gold  standard  is  a  good  thing,  we  point  to 
their  platform  and  tell  them  .that  their  platform 
pledges  their  party  to  get  rid  of  a  gold  standard  and 
substitute  bimetallism.  If  the  gold  standard  is  a 
good  thing,  why  try  to  get  rid  of  it  ? 

The  very  people  who  tell  you  that  we  ought  to 
declare  in  favor  of  international  bimetallism  and 
thereby  declare  that  the  gold  standard  is  wrong,  and 
that  the  principals  of  bimetallism  is  better — these  very 
people  four  months  ago  were  open  and  avowed 
advocates  of  the  gbld  standard  and  telling  us  that 
we  could  not  legislate  two  metals  together  even  with 
all  the  world. 

I  want  to  suggest  this  truth,  that  if  the  gold  stand- 
ard is  a  good  thing  we  ought  to  declare  in  favor  of 
its  retention  and  not  in  favor  of  abandoning  it ;  and 
if  the  gold  standard  is  a  bad  thing,  why  should  we 
wait  until  some  other  nations  are  willing  to  help  us 
to  let  go  ?  Here  is  the  line  of  battle.  We  care  not 
upon  which  issue  they  force  the  fight  We  are  pre- 
pared to  meet  them  on  either  issue  or  on  both.  If 
they  tell  us  that  the  gold  standard  is  the  standard  of 
civilization,  we  reply  to  them  that  this,  the  most 
enlightened  of  all  the  nations  of  the  earth,  has  never 
declared  for  a  gold  standard,  and  both  the  parties  this 


THE  PASTIES  AND  THE  CANDIDATES.  667 

year  are  declaring  against  it  If  the  gold  standard 
is  the  standard  of  civilization,  why  should  we  not 
have  it  ?  So,  if  they  come  to  meet  us  on  that  we 
can  present  the  history  of  our  nation.  More  than 
that,  we  can  tell  them  this,  that  they  will  search  the 
pages  of  history  in  vain  to  find  a  single  instance  in 
which  the  common  people  of  any  land  have  ever 
declared  themselves  in  favor  of  a  gold  standard. 

They  can  find  where  the  holders  of  fixed  invest- 
ments have.  Mr.  Carlisle  said  in  1878  that  this  was 
a  struggling  between  the  idle  holders  of  idle  capital 
and  the  struggling  masses  who  produce  the  wealth 
and  pay  the  taxes  of  the  country,  and,  it  is  simply  a 
question  that  we  shall  decide,  upon  which  side  shall 
the  Democratic  party  fight?  Upon  the  side  of  the 
idle  holders  of  idle  capital,  or  upon  the  side  of  the 
struggling  masses?  That  is  the  question  that  the 
party  must  answer  first,  and  then  it  must  be  answered 
by  each  individual  hereafter.  The  sympathies  of  the 
Democratic  party,  as  described  by  the  platform,  are 
on  the  side  of  the  struggling  masses  who  have  been 
the  foundation  of  the  Democratic  party. 

There  are  two  ideas  of  government  There  are 
those  who  believe  that  if  you  just  legislate  to  make 
the  well-to-do  prosperous  persons,  their  prosperity 
will  leak  through  on  those  below.  The  Democratic 
ideas  have  been  that  if  you  legislate  to  make  the 
masses  prosperous  their  prosperity  will  find  its  way 
up  and  through  every  class  for  taxation.  Mr.  Jeffer- 
son, who  was  once  regarded  as  a  good  Democratic 
authority,  seems  to  have  a  different  opinion  from  some* 
Those  who  are  opposed  to  the  proposition  tell  us 
that  the  issuance  of  paper  money  is  a  function  of  the 


668  BILYEB    AND  GOLD. 

bank,  and  that  the  government  ought  to  go  ont  of 
the  banking  business.  I  stand  with  Jefferson  rather 
than  with  them,  and  tell  them  as  he  did,  that  the 
issue  of  money  is  a  function  of  the  government  and 
that  the  banks  ought  to  go  out  of  the  government 
business.  They  complain  about  that  plank  which 
declares  against  the  life  tenure  in  o£Bice.  They  have 
tried  to  strain  it  to  mean  that  which.it  does  not  mean. 
What  we  oppose  in  that  plank  is  the  life  tenure 
that  is  being  built  up  at  Washington,  which  excludes 
from  party  representation  and  its  benefits  the  humbler 
members  of  our  society. 

We  have  grown  to  70,000,000,  and  declare  that  we 
are  less  independent  than  our  forefathers  ?  No.  It 
will  never  be  the  judgment  of  the  people.  Therefote, 
we  care  not  upon  what  lines  the  battle  is  fought  If 
they  say  bimetallism  is  good  but  we  cannot  have  it 
till  some  nation  helps  us,  we  reply  that  instead  of 
having  a  gold  standard  because  England  has,  we 
shall  restore  bimetallism  and  then  let  Bngland  have 
bimetallism  because  the  United  States  hat. 

If  they  dare  to  come  out  and  in  the  open  defend 
the  gold  standard  as  a  good  thing,  we  shaU  fight  them 
to  the  uttermost,  having  behind  us  the  producing 
masses  of  this  nation  and  the  world.  Having  behind 
us  the  commercial  interests  and  the  laboring  interests 
and  all  the  toiling  masses,  we  shall  answer  their  de- 
mands for  a  gold  standard  by  saying  to  them  you 
shall  not  press  down  upon  the  brow  of  labor  this 
crown  of  thorns.  You  shall  not  crucify  man  on  a 
cross  of  gold* 

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